For construction companies in North Dakota, having the right insurance is crucial for protecting your business. As a contractor, you face diverse risks ranging from property damage and employee injuries to lawsuits and cyber attacks. Purchasing adequate, cost-effective insurance tailored to your operations can safeguard your assets and future.
This guide will uncover insurance costs for North Dakota contractors across popular policies like general liability, workers’ compensation, bonds, equipment coverage, and more. We’ll explore the key variables impacting your premiums, provide benchmarking data for small, medium and large contractors, and suggest strategies to secure favorable rates.
Understanding typical contractor insurance expenses in North Dakota allows you to evaluate policies suitable for your business. While your exact premiums depend on your unique attributes, this data offers helpful context to inform smart insurance decisions.
North Dakota construction professionals should prioritize proper insurance. Key aspects of general liability coverage for contractors are vital for business protection. Workers comp contractors compliance guide ensures your team is covered. Our comprehensive guide to insurance for contractors offers valuable information.
Key Factors Influencing Insurance Costs for Contractors
Here are some key factors that can influence insurance costs for contractors:
– Type of work – The type of contracting work being done (construction, plumbing, electrical, etc.) impacts risk and therefore insurance rates. Higher risk work typically has higher insurance premiums. Roofing contractors, for example, have large liability and workers’ comp premiums due to the hazards.
– Years in business – Contractors who are new to the business often pay higher premiums until they establish a track record over 3-5 years. Insurance companies view experience as an indicator of lower risk. Newer contractors lack credibility.
– Claims history – Prior claims made by a contractor will often result in increased premiums, especially if the claims were large or frequent. Too many claims can make a contractor uninsurable. A clean claims history will help lower rates.
– Coverage limits – Higher levels of coverage for things like general liability or workers’ compensation mean higher premiums. Contractors must weigh the cost vs the amount of protection needed. Lower limits can save money but also expose the contractor to uncovered losses if claims exceed the limits.
– Number of employees – More employees on payroll increases the risk exposure for things like workers’ comp. Rates will be higher as a result. The type of work the employees engage in also affects premiums based on risk level.
– Safety record – Contractors with poor safety records or OSHA violations can expect to pay higher premiums. Proactive safety programs and training helps reduce risk. Lower risk means lower insurance premiums.
– Business size – Larger contracting firms often get lower rates based on economies of scale and broader risk distribution. Smaller firms concentrated in one region pay more. Larger firms have negotiating leverage with insurers.
– Insurance provider – Rates can vary significantly between insurance companies. National firms with deep pockets often offer lower rates. Local providers may lack resources to effectively analyze risk. Competitive bidding is wise.
The key is to maintain excellent records, safety practices, qualifications, experience, and choose appropriate coverages to help minimize insurance costs. Controlling risk lowers premiums. Now let’s explore typical costs.
Small, Medium, Large Contractor Benchmarking in North Dakota
The table below displays our definition for small, medium and large contractors in North Dakota alongside typical insurance coverages secured. This benchmarking data helps provide context on how your costs compare.
| Criteria | Small Contractor | Medium Contractor | Large Contractor | XL Contractor |
| Revenue | $150K | $500K | $1M | $2.5M |
| Employees | 1 | 3 | 5 | 10 |
| Autos | 1 | 2 | 3 | 5 |
| Worth of Tools | $5K | $10K | $25K | $50K |
| General Liability | Yes | Yes | Yes | Yes |
| Workers’ Comp | Yes | Yes | Yes | Yes |
| Commercial Auto | Yes | Yes | Yes | Yes |
| Inland Marine | Yes | Yes | Yes | Yes |
| Umbrella | No | No | Yes | Yes |
Keep in mind premiums fluctuate based on your unique attributes like location, services, safety record, number of employees and vehicles, payroll, and revenue. Contractors who secure tailored coverage with quality carriers and favorable terms may achieve rates well below the averages and toward the lower end of the ranges we provide in the benchmarking that follows.
If in doubt, we encourage you to explore your program with our network of highly skilled and specialized brokers. The brokers in our network specialize in helping contractors realize savings by accessing the right carriers and tailoring coverage to the specific contractor business. Let’s explore some common policies:
General Liability Insurance Costs in North Dakota
General liability, also known as contractor’s liability, protects your business if a third party alleges property damage or bodily injury caused by your construction operations. Typical premiums range from 1% to 5%+ of revenue for $1 million per occurrence limits.
| Low | High | Average | |
| Electrician | |||
| – Small | $1,000 | $2,300 | $1,600 |
| – Medium | $3,100 | $6,000 | $4,300 |
| – Large | $6,400 | $11,000 | $8,000 |
| Plumber | |||
| – Small | $4,000 | $9,000 | $6,700 |
| – Medium | $12,700 | $28,000 | $20,100 |
| – Large | $21,100 | $49,200 | $37,900 |
| Painter | |||
| – Small | $1,200 | $2,400 | $1,700 |
| – Medium | $4,200 | $7,000 | $5,100 |
| – Large | $6,500 | $12,700 | $9,800 |
| Landscaper | |||
| – Small | $831 | $2,114 | $1,400 |
| – Medium | $2,651 | $5,041 | $3,800 |
| – Large | $5,541 | $10,700 | $7,100 |
| Handyman | |||
| – Small | $2,300 | $4,025 | $2,900 |
| – Medium | $7,700 | $11,550 | $8,800 |
| – Large | $15,300 | $21,900 | $18,200 |
| Carpenter | |||
| – Small | $2,000 | $4,700 | $2,900 |
| – Medium | $6,700 | $11,400 | $8,600 |
| – Large | $12,200 | $26,900 | $18,600 |
| General Contractor | |||
| – Medium | $3,700 | $6,700 | $4,800 |
| – Large | $7,400 | $18,200 | $10,800 |
| – XL | $18,600 | $42,700 | $26,800 |
Here are sample annual premium ranges:
| Contractor Revenue | Premium Range |
|---|---|
| $150,000 | $1,500 – $7,500 |
| $500,000 | $5,000 – $25,000 |
| $1 million | $10,000 – $50,000 |
| $2.5 million | $25,000 – $125,000 |
Many factors influence general liability insurance costs for North Dakota contractors:
– Type of work – Certain types like roofing, plumbing, and electrical are seen as higher risk and have higher premiums. Hazardous work leads to more liability claims, so insurance is costlier.
– Revenues – Contractors with higher revenue have greater third-party exposure so pay more for liability coverage. Insurers use revenue size as a proxy for risk level when pricing.
– Claims history – Contractors with past claims, especially costly ones, will see premiums increased. Too many claims makes coverage challenging to find. Clean history helps lower rates.
– Business experience – New contractors are viewed as higher risk and pay more until a 3-5 year track record demonstrates reduced risk. Established contractors get lower rates.
– Risk transfer – Requiring subs to carry General Liability insurance and get performance bonds transfers risk away from the general and lowers their costs.
– Policy limits – Higher liability limits mean higher premiums. $2 million coverage costs more than $1 million. Optimize limits to fit your risk profile.
– Deductibles – Higher deductibles (e.g. $5k vs. $2.5k) significantly reduce premiums but increase out-of-pocket costs in the event of a claim.
– Insurer reputation & competition – Premiums are influenced by an insurer’s loss payout reputation and the level of competition in the market.
Workers Compensation Insurance Costs in North Dakota
Workers’ compensation covers employee injuries and illnesses experienced on the job. Premiums vary based on risk classification, losses, payroll, and other factors. North Dakota ranks among the more affordable states for workers’ comp.
| Low | High | Average | |
| Electrician | |||
| – Small | $678 | $1,482 | $847 |
| – Medium | $1,906 | $4,193 | $2,541 |
| – Large | $2,965 | $6,565 | $4,236 |
| Plumber | |||
| – Small | $705 | $1,542 | $881 |
| – Medium | $1,982 | $4,361 | $2,643 |
| – Large | $3,084 | $6,829 | $4,406 |
| Painter | |||
| – Small | $880 | $1,924 | $1,100 |
| – Medium | $2,474 | $5,443 | $3,299 |
| – Large | $3,848 | $8,521 | $5,498 |
| Landscaper | |||
| – Small | $584 | $1,278 | $730 |
| – Medium | $1,643 | $3,614 | $2,190 |
| – Large | $2,555 | $5,658 | $3,650 |
| Handyman | |||
| – Small | $1,303 | $2,850 | $1,628 |
| – Medium | $3,664 | $8,061 | $4,885 |
| – Large | $5,700 | $12,621 | $8,142 |
| Carpenter | |||
| – Small | $1,533 | $3,354 | $1,916 |
| – Medium | $4,312 | $9,486 | $5,749 |
| – Large | $6,707 | $14,852 | $9,582 |
| General Contractor | |||
| – Medium | $3,907 | $8,547 | $4,884 |
| – Large | $6,105 | $13,431 | $8,140 |
| – XL | $11,396 | $25,234 | $16,280 |
Here are sample workers’ comp premium ranges:
| Contractor Payroll | Premium Range |
|---|---|
| $150,000 | $3,000 – $9,000 |
| $500,000 | $10,000 – $30,000 |
| $1 million | $20,000 – $60,000 |
| $2.5 million | $50,000 – $150,000 |
Many variables influence workers’ compensation costs for contractors:
– Payroll – Higher payroll and more employees mean greater injury risk exposure. Premiums correlate to overall payroll amount.
– Class codes – The type of work impacts rates. Roofing has a higher rate than clerical work. Class codes categorize risk.
– Experience rating – Firms with lower past claims get an ‘experience credit’ on premiums. High claims leads to an ‘experience debit’ increasing premiums.
– Industry trends – Premiums rise across the board if industry-wide claim frequency and severity increases. Insurers pass on losses to policyholders.
– Safety – Good safety programs and lower injury rates can result in discounts for being ‘safety certified’. Poor safety means increased premiums.
– Subcontractors – Using uninsured subs exposes contractors to higher premiums. Requiring subs to get their own coverage lowers risk.
– State laws – Benefit levels, claim statutes, and premium rating rules influence costs. State rate regulations directly impact premiums.
– Deductible programs – Higher deductibles reduce premiums but increase out-of-pocket costs when claims occur. Must weigh trade-offs carefully.
– Insurer – Premiums are influenced by an insurer’s financial strength, loss payout reputation, and overall rates.
Overview of Additional Contractor Insurance Coverages
Beyond general liability and workers’ compensation, additional policies are recommended:
Commercial Auto Insurance
Covers vehicles used for business purposes. Typical premiums range from $1,000 – $3,000 per vehicle. Provides vital coverage for injury and property damage claims arising from the operation of company vehicles.
Inland Marine (Tools) Insurance
Protects expensive tools and equipment onsite and in transit. Typical premiums range from $750 – $2,500 annually for $10,000 to $25,000 in coverage. Prevents out-of-pocket losses if equipment is damaged, lost or stolen.
Surety Bonds
Required for public works and many projects. Typical premiums range from 1-3% of the bond amount based on contractor credit and financials. Essential for contractors seeking public sector and large-scale jobs.
Commercial Property Insurance
Safeguards offices, warehouses, and other business properties. Typical premiums range from $500 – $5,000 annually based on property values, construction, location and other factors. Safeguards buildings and contents against losses from perils like fire, wind, and theft.
Employment Practices Liability
Defends against employment lawsuits around discrimination, harassment, wrongful termination, etc. Typical premiums range from $1,000 – $5,000 annually. Critical for protecting against potentially costly legal claims by employees.
Cyber Liability Insurance
Responds to data breaches, hacking incidents, and electronic theft. Typical premiums range from $500 – $2,000 annually. Helps offset costs of compromised data, computer forensics, legal services, and PR.
Umbrella Liability Insurance
Provides extra protection above other policy limits for large claims. Typical premiums range from $750 – $1,500 annually per $1 million in additional coverage. Cost-effective way to substantially boost liability limits.
Professional Liability
Protects against errors and omissions in professional services resulting in damages. Average premiums range from $2,500 to $5,000 based on profession and revenue. Typically recommended for large engineering and design contractors.
Builder’s Risk Insurance
Insures construction projects against damage during the course of construction. Average premiums range from 0.3% to 3% of the completed value of the project. Recommended for large-scale projects.
Partnering with ContractorNerd.com
Are you a contractor looking to protect your business and secure its future? Look no further than ContractorNerd.com, your dedicated partner in contractor insurance. We understand the unique risks your business faces and are committed to providing you with the best insurance solutions tailored to your specific needs.
Why Choose ContractorNerd.com?
1. Specialized Expertise: When it comes to contractor insurance, one size does not fit all. Our network of insurance specialists is exclusively focused on contractor risks. We know the challenges you face, and we’re here to help you navigate them.
2. Access to Top Markets: Over the years, we have cultivated strong partnerships with the leading insurance providers. This means that when you choose ContractorNerd.com, you gain access to a wide network of trusted insurers. Our connections allow us to swiftly secure multiple quotes tailored to your unique requirements.
3. Cost-Effective Solutions:We understand the importance of cost-effective coverage for your business. Our specialists not only help you find the right insurance but also advise on potential gaps and cost-saving opportunities. This way, you can optimize your protection without overpaying.
Don’t leave your business exposed. Contractor insurance costs in North Dakota can vary significantly based on various factors. Partnering with ContractorNerd.com ensures that you’re making a smart investment to protect your company’s future.
Conclusion
Your contractor business is your livelihood, and protecting it is paramount. At ContractorNerd.com, we are committed to safeguarding your company the right way. Don’t settle for generic insurance solutions or spend endless hours gathering quotes from multiple brokers. Choose the dedicated experts at ContractorNerd.com to secure the future of your contractor business. Get a quick quote today and take the first step towards comprehensive and cost-effective protection.