For construction companies and contractors in Pennsylvania, having adequate insurance is absolutely essential to protect your business from diverse risks. As a contractor, you face potential exposures including third party property damage, employee injuries, cyber incidents, natural disasters, lawsuits, and more. Purchasing cost-effective insurance tailored to your specific operations is crucial to fully safeguard your assets and secure your company’s future.

This detailed guide will uncover typical insurance costs for Pennsylvania contractors across popular policies like general liability, workers’ compensation, surety bonds, commercial auto, equipment coverage, and other supplemental protections. We’ll explore the key variables that can influence your insurance premiums, provide benchmarking data for small, medium and large contractors based on revenue and payroll, and suggest proven strategies to help you secure the most favorable insurance rates possible. 

Understanding typical contractor insurance expenses in Pennsylvania allows you to accurately evaluate policies and coverage options suitable for your business. While your exact premiums depend on your unique risk attributes, this data offers helpful context to inform smart insurance decisions that protect your company without overspending.

Contractors in Pennsylvania need to have the right contractor insurance. This includes general liability insurance for contractors to protect against third-party claims and workers’ comp insurance for contractors to cover employee injuries sustained while working.

Key Factors That Influence Insurance Costs for Contractors

Many variables can affect the insurance premiums contractors pay. Being aware of these influential factors allows you to better manage your risk profile and potentially reduce costs. Here are some of the key factors that can impact insurance costs for contractors:

Type of Work – The specific type of contracting work being performed (general construction, plumbing, electrical, roofing, etc.) greatly impacts the risk exposure and therefore the insurance rates. Generally, contractors conducting more hazardous operations or using heavy machinery will pay higher insurance premiums due to the increased chances of claims.

Years in Business – The length of time a contractor has been operating influences premiums. Contractors who are brand new to the business typically pay higher premiums until they establish a solid track record over several years. Insurance companies view extensive experience as an indicator of lower claims risk.

Claims History – The past claims history of a contractor can have a major impact on premiums. If a contractor has had frequent claims filed against them, or claims with high dollar amounts paid out, insurance companies will consider them high risk and respond with significantly increased premiums. Too many severe claims can even make a contractor uninsurable. Maintaining a clean claims history helps lower rates.

Coverage Limits – The level of coverage limits selected for policies like general liability insurance or workers’ compensation directly impacts premiums. Higher limits mean the insurance company is taking on greater financial exposure, and this increased risk comes with higher premiums. Contractors must weigh the cost versus the amount of protection they truly need.

Number of Employees – The total number of employees on payroll and job sites is factored into insurance premium calculations, especially for workers’ compensation insurance. More employees results in greater overall risk exposure for claims, so rates and premiums climb higher as contractors grow in size.

Safety Record – Contractors with poor safety records, a history of OSHA violations, or frequent job site accidents can expect to pay significantly higher premiums across multiple lines of coverage. Insurance companies reward proactive safety practices that reduce risk. 

Annual Revenue – A contractor’s annual sales and revenue provides insurance companies with an indicator of their business size and corresponding risk. Larger revenue equals greater exposure, so premiums will rise accordingly. Payroll size may be used as well.

Insurance Provider – Insurance rates can vary dramatically between providers. It pays to shop around and compare quotes. Less financially stable insurance companies or those with poor customer service reputations may offer rock bottom rates to win business, but this leaves the contractor exposed. Partnering with high quality, reputable insurance carriers provides better protection.

Policy Deductibles – Choosing higher deductibles is another way contractors can reduce premiums, because it lowers the insurance company’s financial exposure on any one claim. But with higher deductibles, contractors pay more costs out-of-pocket when a claim does occur. Finding the right balance is important.

The key is to maintain excellent safety practices, risk management procedures, and qualifications. Choosing appropriate coverages, limits and deductibles to suit your unique risk profile and following strategies to reduce risk helps minimize insurance costs. Controlling risk lowers premiums.

Small, Medium, Large Contractor Benchmarking in Pennsylvania

The tables below display handy benchmarking data for small, medium and large contractors operating in Pennsylvania. We define business size by annual revenue and number of employees. This data is intended to provide you with a general benchmark to see how your insurance costs compare to other contractors of similar size in your state.

Pennsylvania Contractor Business Size Definitions

CriteriaSmall ContractorMedium ContractorLarge ContractorXL Contractor
Worth of Tools$5K$10K$25K$50K
General LiabilityYesYesYesYes
Workers’ CompYesYesYesYes
Commercial AutoYesYesYesYes
Inland MarineYesYesYesYes
Pennsylvania Average Total Insurance Premium

Keep in mind premiums always fluctuate based on your unique risk attributes like services provided, safety record, specific job sites, number of employees, fleet size, subcontractor usage, and past claims. Contractors who secure tailored coverage from high quality insurance partners and negotiate favorable policy terms can achieve rates toward the lower end of the ranges provided.

If you need help assessing your specific insurance program, we encourage you to request a free quote from our network of highly experienced insurance specialists. The experts in our network provide Pennsylvania contractors with tailored coverage options from top regional and national insurance carriers, often at favorable rates difficult to find on your own.

Typical General Liability Insurance Rates in Pennsylvania 

Pennsylvania Average Premiums for General Liability

General liability, often called CGL, is essential protection that pays for third party property damage or bodily injury caused by your contracting operations, such as a subcontractor’s faulty workmanship damaging a client’s home. It covers legal defense costs and settlements up to the policy limits. Typical policy limits are $1 million per occurrence and $2 million aggregate.

– Small$1,200$3,600$2,200
– Medium$4,000$10,300$6,300
– Large$9,000$19,300$12,300
– Small$5,000$17,600$9,400
– Medium$9,800$39,100$28,000
– Large$22,100$76,800$55,300
– Small$1,600$6,600$3,100
– Medium$3,800$14,900$10,200
– Large$5,400$21,700$16,900
– Small$1,359$4,349$2,600
– Medium$3,903$12,588$7,100
– Large$6,315$27,867$15,000
– Small$4,000$10,800$7,000
– Medium$12,500$20,900$16,500
– Large$27,600$49,600$36,400
– Small$2,800$6,700$4,100
– Medium$9,600$15,000$11,400
– Large$21,100$34,400$26,200
General Contractor
– Medium$5,000$18,500$9,300
– Large$9,800$24,800$16,000
– XL$24,200$58,900$39,000

For most small to midsize contractors in Pennsylvania, general liability insurance premiums range from about $4,000 per year up to $50,000 or more annually  based on revenue, services, risk factors and desired limits. Actual rates vary widely based on unique applicant attributes. Here are some example general liability premium ranges:

Contractor RevenueEst. Annual Premium Range
$200,000$4,000 – $8,000
$500,000$7,000 – $12,000
$1 million$10,000 – $25,000
$2.5 million$16,000 – $38,000
$5 million$26,000 – $62,000

Some key factors that influence general liability insurance costs for contractors in Pennsylvania:

– Type of Work – The construction trades like roofing, plumbing and electrical are seen as higher liability risks, driving up premiums. Hazardous work leads to costly claims.

– Revenue – Higher annual revenue equals greater risk exposure so premiums rise accordingly. Insurance companies use revenue size to gauge risk.

– Claims History – Contractors with past claims will see increased premiums, especially following severe or costly claims. Frequency and severity of past claims predicts future risk.

– Experience – Newer contractors typically pay higher rates until they build experience. Contractors in business for years establish lower risk profiles.

– Risk Transfer – Passing risk to subcontractors via hold harmless agreements lowers liability premiums.

– Limits – Higher liability limits mean greater risk taken on by the insurance company, so premiums climb. Lower limits carry more risk for the contractor being underinsured.

– Deductibles – Choosing higher deductibles reduces premiums but increases your out-of-pocket costs when claims occur.

– Insurance Provider – Premiums and services vary between insurance companies. Financially stable insurers with strong contractor expertise provide the best value. 

Typical Workers Compensation Insurance Rates in Pennsylvania

Pennsylvania Average Premiums for Workers Compensation

Workers compensation insurance is mandatory for most contractors in Pennsylvania to cover injuries, lost wages and medical expenses for employees hurt on the job. Typical policies have $500,000 limits per accident. Premiums vary based on payroll, risk class, experience rating and more.

– Small$1,479$3,236$1,849
– Medium$4,161$9,153$5,547
– Large$6,472$14,331$9,246
– Small$2,242$4,904$2,802
– Medium$6,305$13,872$8,407
– Large$9,808$21,718$14,012
– Small$3,077$6,732$3,847
– Medium$8,655$19,042$11,541
– Large$13,464$29,813$19,234
– Small$736$1,610$920
– Medium$2,070$4,554$2,760
– Large$3,220$7,130$4,600
– Small$3,495$7,645$4,368
– Medium$9,829$21,624$13,105
– Large$15,289$33,855$21,842
– Small$3,000$6,563$3,750
– Medium$8,438$18,565$11,251
– Large$13,126$29,066$18,752
General Contractor
– Medium$10,483$22,932$13,104
– Large$16,380$36,036$21,840
– XL$30,576$67,704$43,680

For many small to midsize Pennsylvania contractors workers comp premiums often fall in the range of $7,500 to $100,000 annually depending on payroll size, risk factors and experience. Actual rates vary widely based on unique applicant attributes. Here are some example workers comp premium ranges:  

Annual PayrollEst. Annual Premium Range
$200,000$7,500 – $20,000
$500,000$12,000 – $35,000
$1 million$25,000 – $50,000
$2.5 million$55,000 – $82,000
$5 million$96,000 – $140,000

Some key factors that influence workers compensation insurance costs for contractors in Pennsylvania:

– Payroll – Payroll directly impacts workers comp premium calculations. More employees and higher payroll increases premiums.

– Risk Class – The type of work performed is classified by risk level. High risk work like roofing has far higher rates than office work. 

– Experience Mod – Contractors are graded on past loss history. Frequent or costly past claims lead to debits increasing premiums. Few/low claims garner credits to decrease premiums.

– Industry Trends – Rising loss trends for the construction industry as a whole will often drive up rates. Safer industry trends lower rates.

– Safety Rating – Contractors with strong safety programs and low loss ratios qualify for discounted premiums. Unsafe job sites lead to increased premiums.

– Premium Modifiers – Premium adjustments like schedule credits and dividends can lower a contractor’s workers comp costs.

– Deductible Programs – Higher deductibles reduce premiums but increase out-of-pocket costs when claims occur. Various deductible options exist.

– Insurance Carrier – Rates and services can vary dramatically between workers comp insurers. Financially stable carriers with construction expertise provide the best value.

Surety Bonds for Contractors in Pennsylvania 

Many public construction projects or large jobs for commercial clients require Pennsylvania contractors to carry surety bonds. These bonds guarantee the contractor will fully perform the work and pay subcontractors and suppliers. This protects the project owner. 

Typical surety bonds required in Pennsylvania include:

– Bid Bonds – Guarantees the contractor will enter into the contract if awarded the bid. Usually 5%-20% of the bid amount.

– Performance Bonds – Guarantees 100% completion of the job. Typically 50%+ of the contract value. 

– Payment Bonds – Guarantees subcontractors and suppliers will be paid. Usually 30%-50%+ of the contract value. 

Due to the risk transfer, surety bond premiums average 2%-4% of the bond amount based on the contractor’s financial strength, experience and credit rating. Stronger contractors can qualify for rates as low as 1%-2% in some cases. Weak contractors may pay 10% or be denied bonding.

Factors that determine surety bond rates include:

– Credit Score – Contractors with strong personal credit typically qualify for lower bond rates.

– Revenue and Assets – Higher revenue and assets help contractors secure larger bonds at better rates 

– Profitability – Consistent profitability provides sureties with assurance of the company’s financial strength. Loss years can result in much higher rates.

– Experience – Years in business and a solid track record help reduce bond rates for qualified contractors.

– Claims and Completion History – Any past issues, liens or lawsuits involving previous jobs influence bond rates. Timely job completion is ideal. 

– Relationship with Surety – Working with the same surety over several years helps contractors improve rates and bonding capacity.

Other Common Insurance Coverages for Contractors

In addition to general liability, workers compensation and surety bonds, many Pennsylvania contractors need supplemental insurance policies to protect their business. Typical coverages include:

Commercial Auto Insurance – Covers vehicles used for business purposes like work trucks. Typical premium ranges from $2,000 – $8,000 per vehicle annually.

Inland Marine (Contractors Equipment) Insurance – Protects expensive tools, equipment and machinery on job sites and in transit. Typical premium ranges from $3,000 – $15,000 annually.

Builders Risk Insurance – Covers construction projects and properties while under construction against damage for covered losses. Premiums range from $2,000 to $50,000+ annually depending on project value. 

Commercial Property Insurance – Safeguards business premises like offices, warehouses, and storage yards. Typical premiums range from $5,000 to $25,000 per year for small to midsize contractors.

Cyber Liability Insurance – Covers data breaches, hacker attacks, computer virus damage and electronic theft. Premiums start around $1,000 annually.

Employment Practices Liability Insurance (EPLI – Protects against claims like wrongful termination, discrimination, harassment or other employment lawsuits. Annual premiums start around $2,500.

Excess/Umbrella Liability Insurance – Provides additional liability limits above general liability and auto coverage. Adds an extra layer of protection. Annual premiums start around $1,500 per $1 million in additional coverage limits.

Saving on Pennsylvania Contractor Insurance Premiums 

Here are some proven tips and strategies contractors operating in Pennsylvania can utilize to optimize their insurance coverage while also saving on premium costs:

– Maintain a Clean Claims History – Avoid frequent claims by emphasizing injury prevention and sound risk management. Past claims drive up premiums.

– Prioritize Job Site Safety – Create, enforce and document rigorous safety protocols to reduce on-the-job accidents and earn safety program discounts. 

– Review Limits and Deductibles – Optimize deductibles and liability limits for your risk tolerance. Higher deductibles substantially reduce premiums.

– Bundle Insurance Policies – Combining multiple policies with the same carrier can trigger multi-policy discounts up to 15%+. Maximizing discounts helps lower insurance costs.  

– Seek Group Insurance Options – Joining regional construction associations provides access to group insurance programs that pool risk and result in lower rates.

– Use Subcontractor Agreements – Requiring subs to carry general liability and workers comp coverage protects you and saves insurance costs.

– Request Premium Audits – Carefully review insurance audits for misclassifications or incorrect data that may be inflating premiums. Identifying errors leads to refunds and lower future premiums. 

– Improve Your Experience Mod – Identify ways to boost your experience rating such as safety programs, claim management, mod optimization to achieve discounts.

– Quote Competitively – Get proposals from multiple regional and national insurance carriers. Comparing rates helps identify the best value. Independent agents access multiple markets.  

Pennsylvania Contractor Insurance – Partner with

Are you searching for customized, affordable contractor insurance to protect your Pennsylvania construction business? Look no further than here. We are your ideal partner when it comes to securing the very best insurance coverage at competitive rates for your unique business.

For over 15 years, has been a trusted resource for Pennsylvania contractors seeking insurance designed for their profession and priced right. Partnering with gives you access to:

Pennsylvania’s Top Regional & National Insurance Carriers – Our dedicated agents represent high quality national and regional insurance carriers including The Hartford, Travelers, Chubb, CNA, Amerisure, Allianz, Progressive, Selective, Erie, Foremost, Encompass and more. These A-rated carriers offer top-notch service plus the ability to write specialized contractor insurance products in Pennsylvania at very competitive rates. ensures you receive multiple proposals from their top provider panel to find your best fit.

Tailored Coverage and Premium Savings – Our independent insurance agents have extensive experience designing tailored coverage solutions that provide a perfect fit for each client’s unique risk profile and operations. They’ll identify cost savings by featuring your strengths to earn discounts, selecting optimal deductibles and limits, and bundling multi-policy packages. Their specialization in contractor insurance saves you money.

Superior Policy Management & Service – Our dedicated professional insurance advisors act as your single source for ongoing policy administration, certificates of insurance, coverage explanations, policy audits, premium billing, compliance and claims assistance. This saves you time while ensuring your insurance program is fully managed year-round. Their expertise resolves issues quickly should any arise.

Don’t leave your construction business and its future needlessly vulnerable. Comprehensive, affordable insurance tailored for Pennsylvania contractors is a call or click away at Get your quick no obligation insurance quote today to lock in protection and savings!