Purchasing adequate and cost-effective insurance is crucial for construction companies in South Carolina looking to protect their business from the diverse risks inherent to contracting work. From property damage and injury claims to lawsuits and natural disasters, having proper insurance safeguards your company’s assets and future.
This comprehensive guide will uncover typical insurance costs for South Carolina contractors across popular policies like general liability, workers’ compensation, surety bonds, commercial auto, and more. We’ll explore the key variables impacting your premiums, provide detailed benchmarking data for small, medium and large contractors, and suggest strategies to secure favorable rates.
Understanding typical contractor insurance expenses in South Carolina allows you to thoroughly 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.
South Carolina’s contracting landscape demands thorough insurance coverage. Contractor liability insurance cost factors are essential for budgeting. Workers’ compensation insurance for contractors fundamentals are crucial for workforce protection. For comprehensive information on affordable contractor insurance, consult our resources.
Key Factors Influencing Insurance Costs for Contractors
Several important factors can influence insurance costs for contractors operating in South Carolina:
– Type of work – The specific trade being performed has a major impact on insurance rates. Certain high-risk trades like roofing, plumbing, electrical, and demolition tend to have much higher insurance premiums than lower-risk trades like concrete work or carpentry. Insurers view risky work as more likely to lead to claims, so they charge more.
– Years in business – The length of time a contractor has been operating also affects insurance pricing. New businesses are considered higher risk by insurers until they establish a solid track record in the industry. Contractors who have been in business for 5+ years tend to get better rates.
– Claims history – A contractor’s past history of insurance claims will significantly influence rates. Too many claims, especially large and costly claims, can sometimes make contractors uninsurable altogether. A clean claims history helps lower premiums.
– Coverage limits – The level of liability coverage and policy limits choosen for things like general liability and workers’ compensation directly impacts insurance costs. Higher limits mean more risk transferred to the insurer, so prices are higher. Contractors must balance cost savings vs. adequate protection.
– Number of employees – The number of employees on payroll affects premiums for workers’ compensation and other policies. More employees equals greater overall risk exposure for things like workplace injuries. Rates tend to rise as payroll size increases.
– Safety record – A contractor’s safety track record also impacts premiums. Those with large numbers of OSHA violations, worksite accidents, and high injury rates will see increased insurance rates due to being deemed high-risk. Those with excellent safety programs and low injury rates may qualify for discounted premiums.
– Business size – In general, business size plays a role in insurance pricing. Larger contractors tend to pay lower premiums based on economies of scale and their ability to spread risk over a wider revenue base. Small contractors with lower revenues have less risk diversification and therefore pay higher premium prices.
– Insurance provider – The actual insurance company providing coverage also influences costs. Insurance carriers have different loss payout reputations, financial strength ratings, local competitiveness, and service. These factors can lead to pricing differences between insurers.
Controlling risk through prudent business practices like safety initiatives, staff training, project diversification, and maintaining experienced qualified staff can help minimize insurance costs by lowering the chances of claims. Transferring risk to subs via insurance requirements also lowers a contractor’s direct exposure.
Small, Medium, Large Contractor Benchmarking
Below we have outlined typical insurance coverages, policy limits, and our definitions of small, medium and large contractors in South Carolina. This provides a general benchmark range for insurance costs based on business size.
Keep in mind, premiums can vary significantly even between contractors of the same size depending on specific risk characteristics like location, safety initiatives, project types, claims history, number of employees/vehicles, payroll size, and revenue. Working with specialized insurance brokers can help contractors properly tailor coverage and achieve significant savings.
– General Liability Coverage ($1 Million Occurrence/$2 Million Aggregate)
– Workers’ Compensation Coverage
– Commercial Auto Insurance
– Inland Marine/Contractors Equipment Coverage
– Builder’s Risk Insurance
– Commercial Property Insurance
– Cyber Liability Insurance
– Pollution Liability Insurance
– Commercial Umbrella Liability Insurance
| 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 |
General Liability Insurance Costs
General liability, also known by its abbreviation CGL, is a foundational policy for contractors that pays to defend against and settle third-party bodily injury, property damage, and personal injury claims arising from your operations. For example, if a subcontractor gets injured on your job site and alleges it was your company’s negligence, general liability would provide legal defense and cover any settlement or court award.
| Low | High | Average | |
| Electrician | |||
| – Small | $1,100 | $4,400 | $2,700 |
| – Medium | $2,800 | $9,400 | $6,900 |
| – Large | $6,000 | $22,100 | $13,600 |
| Plumber | |||
| – Small | $6,400 | $16,300 | $13,800 |
| – Medium | $40,300 | $60,450 | $46,600 |
| – Large | $80,200 | $121,200 | $98,300 |
| Painter | |||
| – Small | $1,100 | $6,700 | $2,900 |
| – Medium | $2,800 | $13,200 | $7,100 |
| – Large | $5,900 | $29,800 | $15,500 |
| Landscaper | |||
| – Small | $731 | $3,296 | $1,700 |
| – Medium | $1,518 | $6,187 | $4,400 |
| – Large | $3,119 | $13,146 | $8,600 |
| Handyman | |||
| – Small | $1,600 | $16,100 | $5,500 |
| – Medium | $4,900 | $33,500 | $13,800 |
| – Large | $9,600 | $79,700 | $29,400 |
| Carpenter | |||
| – Small | $2,200 | $12,300 | $5,600 |
| – Medium | $6,100 | $28,800 | $15,100 |
| – Large | $13,300 | $68,600 | $33,100 |
| General Contractor | |||
| – Medium | $5,700 | $29,700 | $14,300 |
| – Large | $11,400 | $40,300 | $23,100 |
| – XL | $28,500 | $116,600 | $76,600 |
Standard general liability policy limits for small to mid-sized contractors are:
– $1 Million Per Occurrence
– $2 Million General Aggregate
Based on these standard limits, typical estimated general liability insurance costs for contractors in South Carolina range from 1% to 5% of gross annual revenues depending on risk factors like:
– Type of contracting work
– Revenue size of the business
– Claims history
– Years in business
– Risk transfer to subcontractors
– Policy coverage limits
– Size of policy deductible
– Financial strength of insurance carrier
For example, a high-risk trade like roofing may fall towards the upper end of that range at 4% to 5% of revenues, while a lower-risk trade like concrete contractors may be on the lower end from 1% to 2% of revenue.
Some examples to illustrate how premiums typically scale:
Typical General Liability Premium Range in South Carolina
| Annual Revenue | Est. Annual Premium Range |
|---|---|
| $500,000 | $5,000 – $25,000 |
| $1 Million | $10,000 – $50,000 |
| $5 Million | $50,000 – $250,000 |
| $10 Million | $100,000 – $500,000 |
Factors that can help reduce general liability insurance costs include:
– Maintaining rigorous safety programs to prevent worksite injuries
– Requiring subcontractors to carry adequate general liability coverage
– Asking for additional insured status on subcontractors’ liability policies
– Ensuring proper licensing and training for all employees
– Keeping detailed documentation of projects & safety meetings
– Avoiding doing work beyond your expertise
– Choosing moderate liability limits to balance cost vs risk protection
– Selecting a higher deductible such as $5k or $10k to lower premiums
– Comparing quotes across multiple highly rated insurance carriers
Workers Compensation Insurance Costs
Workers’ compensation insurance is a mandatory policy for almost all contractors in South Carolina. It provides medical and wage benefits to employees who suffer job-related injuries and illnesses.
| Low | High | Average | |
| Electrician | |||
| – Small | $1,446 | $3,164 | $1,808 |
| – Medium | $4,068 | $8,950 | $5,424 |
| – Large | $6,328 | $14,013 | $9,040 |
| Plumber | |||
| – Small | $1,586 | $3,469 | $1,982 |
| – Medium | $4,460 | $9,813 | $5,947 |
| – Large | $6,938 | $15,364 | $9,912 |
| Painter | |||
| – Small | $2,376 | $5,197 | $2,970 |
| – Medium | $6,682 | $14,701 | $8,910 |
| – Large | $10,395 | $23,017 | $14,850 |
| Landscaper | |||
| – Small | $1,232 | $2,695 | $1,540 |
| – Medium | $3,465 | $7,623 | $4,620 |
| – Large | $5,390 | $11,935 | $7,700 |
| Handyman | |||
| – Small | $7,048 | $15,418 | $8,810 |
| – Medium | $19,824 | $43,612 | $26,431 |
| – Large | $30,837 | $68,281 | $44,052 |
| Carpenter | |||
| – Small | $5,536 | $12,109 | $6,919 |
| – Medium | $15,569 | $34,251 | $20,758 |
| – Large | $24,218 | $53,626 | $34,597 |
| General Contractor | |||
| – Medium | $21,144 | $46,253 | $26,430 |
| – Large | $33,038 | $72,683 | $44,050 |
| – XL | $61,670 | $136,555 | $88,100 |
South Carolina ranks close to the national average for workers’ compensation costs, higher than some states but lower than high-cost states like California. For contractors, typical workers’ comp premiums in South Carolina range from 2% to 10% of payroll depending on the amount of risk inherent to the type of trade. For example, 10% of payroll is common for very high-risk roofing contractors whereas 2-3% of payroll is more typical for lower-risk trades like drywall installation or plumbing.
Some example workers’ comp premiums:
Typical Workers’ Comp Premiums in South Carolina
| Annual Payroll | Est. Annual Premium Range |
|---|---|
| $500,000 | $10,000 – $50,000 |
| $1 Million | $20,000 – $100,000 |
| $5 Million | $100,000 – $500,000 |
| $10 Million | $200,000 – $1,000,000 |
Major variables that influence workers’ compensation insurance costs include:
– Total payroll amount
– The risk level of job duties employees perform (job classifications)
– Number of employees
– Contractor’s experience rating (modifier)
– Worksite safety initiatives
– Injury claim frequency and severity
– Use of return-to-work programs
– Industry trends and risks
– Premium discounts for drug-free workplace, safety programs, etc.
– Paying premiums in installments vs upfront
– Deductible level selected
– Regulations in South Carolina
Strategies that can help reduce workers’ compensation costs include:
– Providing extensive safety training for all employees
– Ensuring onsite supervisors actively enforce safety protocols
– Investing in proper safety equipment and gear
– Conducting drug testing of employees
– Promoting overall employee health and wellbeing
– Having a certified safety professional help manage your program
– Implementing robust return-to-work programs for injured staff
– Choosing a higher deductible such as $10k per claim
Additional Common Insurance Coverages for Contractors
In addition to general liability and workers’ compensation policies, contractors in South Carolina need various supplemental insurance coverages:
Commercial Auto Insurance
Pays for bodily injury/property damage caused by vehicles used for business purposes. Typical auto premiums range from $1,500 – $5,000 per vehicle depending on factors like:
– Number of vehicles
– Types of vehicles
– Business use percentage
– Radius of operations
– Driving records of employees
– Liability and physical damage limits
– Deductibles chosen
– Safety features and driver training
– Insurance carrier
Surety Bonds
Required by law for public works projects. Bonds guarantee the contractor will complete the job per the terms of the contract. Typical surety bond costs range from 1% to 3% of the total bond amount based on the contractor’s personal and business finances and credit.
Inland Marine Insurance (Contractors Equipment Coverage
Covers damage to contractors’ tools, equipment, and machinery on job sites and in transit. Typical inland marine premiums range from $2,500 per year up to $20,000+ depending on the value of equipment insured and desired limits.
Builders Risk Insurance
Covers damage to construction projects under contract while being built. Premiums vary widely based on the project size and values involved. Typically provided on a per-project basis.
Commercial Property Insurance
Protects business properties like offices, warehouses, and job site trailers from damage. Typical premiums range from $2,500 up to $50,000+ per year depending on property values, locations, and amount of insurance purchased.
Cyber Liability Insurance
Covers costs related to data breaches, hacking incidents, electronic theft, and cyber threats. Premiums range from $500 per year up to $10,000+ depending on revenues and amount of coverage purchased.
Pollution Liability Insurance
Protects against bodily injury and property damage from pollution incidents. Starts around $2,000 per year and up depending on business size and coverage level.
Commercial Umbrella Liability Insurance
Provides additional liability limits above primary insurance like general liability and auto coverage. Typical premiums range from $1,000 to $5,000 per year for each $1 million in additional umbrella limits.
Professional Liability (Errors & Omissions) Insurance
Covers liability for mistakes made during the performance of contracting services that fail to meet the accepted standard of care. Premiums vary based on services provided and revenue.
Employment Practices Liability Insurance
Protects against employment-related lawsuits like wrongful termination, discrimination, harassment. Typical premiums range from $3,000 – $15,000+ per year based on number of employees.
Strategies for South Carolina Contractors to Save on Insurance
There are a number of strategies South Carolina contractors can employ to optimize their insurance program and achieve significant premium savings:
– Shop insurance rates from multiple highly-rated carriers instead of relying on one provider. Independent agents have access to more insurance markets.
– Seek out tailored package policies combining multiple coverages with one insurer to maximize discounts.
– Ask about premium credits for risk management practices like formal safety programs, job site inspections, safety equipment investments, etc.
– Maintain proper classification and separation of high-risk vs low-risk payroll and operations to minimize premiums.
– Research and discuss options for higher deductibles in exchange for lower premiums.
– Avoid claim situations by adhering to rigorous safety protocols and requiring subcontractors to maintain adequate insurance.
– Consider starting a captive insurance company or joining a risk purchasing group if your company has multiple contractors or builders.
– Meet with an insurance broker at least twice per year to review your program and help tweak coverages or limits.
– Take advantage of premium discount programs offered by insurance carriers and industry associations.
– Offer potential insurers robust data on your operations, safety practices, and risk profile to help secure favorable pricing.
Partnering with a Specialist Contractor Insurance Agency
Navigating insurance for contractors can be challenging, but working with the right insurance advisor makes the process smooth and efficient.
ContractorNerd is a leading specialist when it comes to contractor insurance. Our experts are dedicated to serving the complex needs of South Carolina contractors.
Choosing ContractorNerd gives you access to:
– Trusted Expertise – Our team focuses 100% on contractor insurance, so you can trust you are getting advisors who truly understand your business and risks. We live and breathe contractor insurance and keep up-to-date on the latest insurance trends in South Carolina.
– Choice of Leading Providers – Through our strong industry relationships, we can access many of the top insurance carriers providing coverage to South Carolina contractors. This allows us to compare multiple specialized options to find you the right fit.
– Tailored Solutions – We take the time to learn about the unique operations and risk attributes of your contracting business. This enables us to customize optimal insurance solutions at competitive prices.
– Proactive Guidance – Our advisors explain coverages, exclusions, limits, and suggest potential gaps or cost-saving adjustments. We provide ongoing support to ensure your program evolves with your business.
Don’t leave your important insurance decision to chance. Partner with the experts at ContractorNerd to protect your contracting business the right way.
Conclusion
Purchasing adequate insurance tailored to your specific contracting operation is crucial for protecting your South Carolina business from risk. Understanding typical costs and benchmark ranges allows you to make informed insurance decisions.
With its team of dedicated specialists, ContractorNerd has the expertise required to strategically minimize your insurance expenses while avoiding coverage gaps. Our advisors find you optimal solutions from top insurance carriers.
Don’t settle for generic, one-size-fits-all insurance packages. You need advisors who know South Carolina contractor insurance inside and out. Partner with ContractorNerd to invest in your business and its future the smart way. Visit our website or give us a call to get started.