Operating a construction business in Vermont comes with substantial risk. As a contractor, you face diverse exposures including property damage, employee injuries, lawsuits, cyber attacks and more. Having adequate, cost-effective insurance tailored to your specific operations is crucial for protecting your company’s assets and future.
This comprehensive guide will uncover typical insurance costs for Vermont contractors across core policies like general liability, workers’ compensation, bonds, equipment coverage, and other crucial protection. We’ll explore the key factors impacting your premiums, provide benchmarking data for small, medium and large contractors based on revenues and payroll, and suggest strategies to secure favorable insurance rates.
Gaining visibility into typical contractor insurance expenses in Vermont allows you to make informed decisions when evaluating policies suitable for your business. While your exact premiums depend on your unique attributes and risk profile, this data offers helpful context to guide smart insurance decisions.
Vermont contractors need robust insurance protection. Liability insurance contractor requirements unpacked is vital for safeguarding operations. Workers compensation for contractors best practices ensures your workforce is protected. Our guide on contractor business insurance considerations offers comprehensive information.
Key Factors Influencing Insurance Costs for Vermont Contractors
Several important factors can influence insurance costs for contractors operating in Vermont:
– Type of work – The specific trade being performed (construction, plumbing, electrical, HVAC, etc) directly impacts the risk and liability exposures. More hazardous trades like roofing or excavation tend to have higher insurance premiums compared to lower risk trades.
– Years in business – Contractors who are brand new to the industry often pay higher premiums until they establish a track record over several years. Insurance carriers use years in business as an indicator of lower claims frequency and overall risk.
– Claims history – Prior claims filed against a contractor will likely result in increased premiums, especially if the claims were large or frequent. Too many claims can even make a contractor uninsurable. Maintaining a clean claims history helps lower insurance rates.
– Coverage limits – Higher liability coverage limits or workers’ compensation coverage limits translate into higher premiums. Contractors must weigh the cost versus the adequate level of protection needed for their business.
– Safety record – Contractors with poor safety histories, OSHA violations, or lack of formal safety programs will pay higher premiums due to increased risk. Those who invest in robust safety can qualify for discounts.
– Number of employees – More employees on the payroll increases the overall risk exposure for workers’ compensation claims, liability claims, and other losses. More employees equals higher premiums.
– Business size – Larger contracting firms often qualify for lower rates based on economies of scale and their ability to spread/diversify risk over a broader base. Smaller contractors tend to pay higher premiums across most policies.
– Insurance provider – Rates can vary significantly between insurance carriers based on financial strength, service, tenure in the market, and other factors. Comparing quotes from multiple carriers is wise.
– Deductibles – Choosing higher deductibles (your out-of-pocket costs before insurance kicks in) leads to lower premiums, but increases your upfront costs in the event of a claim.
Keeping excellent records, investing in safety, securing contractual risk transfer, and comparing carriers helps minimize insurance costs. Controlling your risk is key to lowering premiums.
Small, Medium and Large Contractor Benchmarking in Vermont
The table below displays typical insurance coverages secured by small, medium and large contractors in Vermont, along with our definitions for business size. Use this as a helpful benchmark to understand how your insurance 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 that actual premiums vary based on your unique risk attributes, safety record, services, employees, vehicles, tools/equipment, payroll, revenues, location, and other differentiators. Contractors who secure coverage using a brokerage experienced in contractor risks can often achieve premiums below industry averages.
If you need guidance assessing your specific exposures, we encourage you to request a free quote from our network of highly experienced contractor insurance specialists. Their expertise helps contractors access the best carriers and optimized coverage.
General Liability Insurance Costs in Vermont
General liability, also referred to as CGL, protects your contracting business against third party claims alleging property damage or bodily injury arising from your work, operations, completed projects, or premises. It’s one of the most critical insurance policies for contractors.
| Low | High | Average | |
| Electrician | |||
| – Small | $900 | $2,000 | $1,400 |
| – Medium | $2,400 | $3,900 | $3,400 |
| – Large | $3,900 | $9,000 | $6,600 |
| Plumber | |||
| – Small | $4,700 | $8,600 | $6,200 |
| – Medium | $13,700 | $20,550 | $16,000 |
| – Large | $23,700 | $43,300 | $32,500 |
| Painter | |||
| – Small | $900 | $2,800 | $1,500 |
| – Medium | $2,100 | $5,300 | $3,200 |
| – Large | $3,800 | $11,000 | $7,400 |
| Landscaper | |||
| – Small | $502 | $1,321 | $1,000 |
| – Medium | $953 | $4,904 | $2,700 |
| – Large | $2,050 | $8,051 | $4,500 |
| Handyman | |||
| – Small | $1,900 | $3,325 | $2,300 |
| – Medium | $6,300 | $9,450 | $6,900 |
| – Large | $12,600 | $16,900 | $14,700 |
| Carpenter | |||
| – Small | $1,500 | $3,600 | $2,500 |
| – Medium | $4,300 | $8,900 | $7,400 |
| – Large | $8,400 | $21,000 | $16,300 |
| General Contractor | |||
| – Medium | $3,000 | $11,400 | $6,200 |
| – Large | $5,800 | $16,100 | $10,200 |
| – XL | $14,300 | $37,700 | $23,400 |
For smaller contractors in Vermont, general liability insurance premiums often range from $2,000 – $7,000 annually. Medium-sized contractors may spend between $7,000 – $25,000 depending on specific risk factors. Larger contractors with multiple employees and several million in revenues may invest $25,000 or much more in their general liability program.
Some of the key factors that influence general liability insurance costs for contractors in Vermont include:
– Type of work – The trades perceived as higher risk like plumbing, electrical, roofing, and demolition tend to pay higher CGL premiums compared to lower risk trades like janitorial or carpentry. High risk trades have more frequent and severe claims.
– Revenue – Your annual contracting revenue is a core factor in determining premiums. Higher revenue = greater risk exposure = higher premiums in insurance company underwriting models. Many carriers use a rate per $1,000 of revenue.
– Claims history – Contractors with past liability claims will see increased premiums, especially following severe or frequent claims. Too many claims can mean being denied coverage entirely. Maintaining a clean record dramatically helps lower liability costs.
– Experience – Newer contracting businesses are viewed as higher risk until they build a solid reputation over 3+ years. New businesses pay higher rates. Once experience is proven, premiums drop accordingly.
– Risk transfer – Contracts requiring subcontractors to carry adequate GL insurance and including hold harmless agreements reduce a contractor’s liability risk substantially. Verifying subcontractor insurance also lowers premiums.
– Policy limits – Higher liability limits mean higher premiums, but lower limits may expose you to uncovered losses if sued. Limits of $1 million per occurrence or higher are common for small-midsize contractors to protect assets.
– Deductibles – Choosing a higher deductible (like $5,000 – $25,000 per claim) substantially reduces premiums but increases your upfront costs when a claim is filed.
– Safety – Contractors who implement robust safety programs, document training, and have low injury rates qualify for discounts with some insurers. Lack of safety leads to increased premiums.
– Insurance company – The carrier’s market reputation, financial strength, service levels, and pricing power influences costs. Comparing insurers is wise. An experienced broker has access to more carrier options to find the best value.
Workers Compensation Insurance Costs in Vermont
Workers’ compensation insurance covers medical expenses and lost wages for employees who suffer job-related illnesses or injuries. It is mandatory for nearly all employers in Vermont. Costs vary based on risk classification, claims history, payroll, and other factors.
| Low | High | Average | |
| Electrician | |||
| – Small | $1,468 | $3,212 | $1,835 |
| – Medium | $4,130 | $9,085 | $5,506 |
| – Large | $6,424 | $14,224 | $9,177 |
| Plumber | |||
| – Small | $2,367 | $5,177 | $2,958 |
| – Medium | $6,657 | $14,645 | $8,875 |
| – Large | $10,355 | $22,928 | $14,792 |
| Painter | |||
| – Small | $3,167 | $6,928 | $3,959 |
| – Medium | $8,907 | $19,595 | $11,876 |
| – Large | $13,855 | $30,679 | $19,793 |
| Landscaper | |||
| – Small | $1,984 | $4,340 | $2,480 |
| – Medium | $5,580 | $12,276 | $7,440 |
| – Large | $8,680 | $19,220 | $12,400 |
| Handyman | |||
| – Small | $4,267 | $9,335 | $5,334 |
| – Medium | $12,002 | $26,404 | $16,002 |
| – Large | $18,669 | $41,339 | $26,670 |
| Carpenter | |||
| – Small | $3,691 | $8,074 | $4,614 |
| – Medium | $10,381 | $22,838 | $13,841 |
| – Large | $16,148 | $35,756 | $23,068 |
| General Contractor | |||
| – Medium | $12,802 | $28,004 | $16,002 |
| – Large | $20,003 | $44,006 | $26,670 |
| – XL | $37,338 | $82,677 | $53,340 |
For small Vermont contractors, workers’ compensation premiums may range from $5,000 – $25,000+ based on payroll and other variables. Medium-sized contractors often invest $25,000 – $100,000, while large contractors pay over $100,000.
Some key variables that influence workers’ compensation insurance costs for Vermont contractors include:
– Payroll – Payroll is a major factor in premium calculations. Higher payroll and headcount equals greater workers’ comp premiums. Construction trades are classified by risk with higher premium rates.
– Experience rating – Businesses are graded on past loss history. Contractors with fewer or smaller claims get an ‘experience credit’ reducing premiums. High cost or frequent claims lead to an ‘experience debit’ increasing premiums.
– Industry trends – Workers’ compensation insurance rates for the construction sector as a whole influence costs. If industry loss trends rise, rates increase.
– Safety initiatives – Contractors who invest in safety management, training, and equipment may qualify for discounted premiums from some carriers if they maintain low injury rates.
– Claims management – Prompt and effective claims handling keeps cases from escalating and mitigates long-term payouts. Partnerships with workers’ comp specialists help optimize claim outcomes.
– Policy deductible – Higher deductibles reduce premiums but increase your upfront costs for each claim. For larger contractors, deductibles may reach $100,000 or more.
– Subcontractors – Using uninsured subcontractors adds risk and liability. Requiring subs to carry workers’ comp coverage or securing a separate policy removes exposures.
– Insurance company – The carrier’s loss ratios, services, stability, and pricing influence overall costs. An experienced broker provides access to top insurance markets to compare quotes.
Additional Insurance Coverages and Typical Premiums
In addition to general liability and workers’ compensation, some key insurance policies Vermont contractors need include:
Commercial Automobile Insurance – Covers vehicles used for business purposes. Typical premiums range from $2,000 – $5,000 per vehicle.
Inland Marine (Tools/Equipment Coverage – Protects tools, equipment, machinery against theft and damage on job sites and in transit. Typical premiums range from $2,500 – $10,000+ depending on schedule of equipment.
Surety Bonds – Required for public works and certain projects to guarantee contract performance. Typical rates range from 1-4% of the total bond amount based on financials.
Builder’s Risk Insurance – Protects construction projects against weather damage, theft and vandalism. Premiums vary by project size and duration.
Commercial Property Insurance – Safeguards business offices, warehouses, rented buildings against property damage, theft, or business interruption. Typical premiums range from $1,000 – $10,000+ depending on property values.
Cyber Liability – Covers data breaches, hacking incidents, and electronic theft. Premiums range from $500 – $2,500+ depending on revenues.
Employment Practices Liability – Defends against employment-related lawsuits. Typical premiums range from $2,000 – $7,500 annually.
Umbrella Liability – Provides additional limits above primary general liability and auto policies. Added coverage costs $1,000 to $2,500+ per $1 million.
Partner with ContractorNerd.com for Vermont Insurance
Are you looking for smart insurance solutions to protect your Vermont construction business? Look no further than ContractorNerd.com. As your dedicated partner, our insurance specialists have deep expertise tailored specifically to contractors.
Why Choose ContractorNerd.com?
– Specialized Expertise – Our team has decades of combined experience specifically helping contractors navigate risks and optimize insurance coverage. We know the unique challenges you face.
– Access to Top Insurance Markets – We maintain partnerships with leading national, regional and local insurance carriers. This gives us the ability to shop multiple markets to find you the best value.
– Cost-Effective Solutions – Our independent brokers advise on potential gaps as well as cost-saving opportunities to help you get the most appropriate protection at the best available price.
Don’t Leave Your Vermont Business Exposed. Work with ContractorNerd.com to make a smart investment in your company’s future and avoid unnecessary risk. Request a quick, no obligation quote today!