Purchasing adequate and affordable insurance tailored to your specific operations is crucial for construction companies in Wisconsin looking to protect their business. As a contractor, you face diverse risks ranging from property damage and employee injuries to lawsuits and cyber attacks that can severely disrupt your company if not properly insured against.
This comprehensive 3,000 word guide will uncover typical insurance costs for Wisconsin contractors across policies like general liability, workers’ compensation, surety bonds, commercial auto, equipment coverage, and more. We’ll explore the key variables that can significantly impact your premiums, provide detailed benchmarking data for contractors of all sizes, and suggest strategies to secure favorable rates.
Understanding typical contractor insurance expenses in Wisconsin allows you to accurately evaluate policies suitable for your business. While your exact premiums depend on your unique attributes and exposures, this data offers helpful context to inform smart insurance decisions.
Wisconsin contractors need robust insurance solutions. Liability insurance strategies for contractor businesses are vital for risk management. Workers comp insurance regulations for contractors clarified ensures your team is covered. Our guide on comprehensive insurance solutions for contractors offers detailed coverage information.
Key Factors Influencing Contractor Insurance Costs
Many variables influence the insurance costs for contractors in Wisconsin. Being aware of these key factors allows you to better manage risks and premiums. Here are some of the most impactful considerations:
– Type of Work – The specific trade being performed (construction, plumbing, electrical, HVAC, etc.) greatly impacts risk and therefore the base insurance rates. More hazardous trades like roofing and demolition tend to have much higher premiums.
– Years in Business – Newer contractors are viewed as higher risk until they establish a solid track record. Insurance companies use years in business as an indicator of lower claims frequency and therefore lower risk. New businesses pay higher premiums.
–Past Claims – Too many past liability or workers’ comp claims, especially if severe and costly, can make a contractor uninsurable. Having past claims will always increase renewal premiums. A clean loss run helps secure lower rates.
– Coverage Limits – Higher liability limits or workers’ comp coverage means increased premiums. Contractors must weigh the cost vs. the amount of protection desired. Minimum legal limits provide less coverage but reduce costs.
– Number of Employees – Having more employees on payroll increases the overall risk exposure for policies like workers’ compensation. More employees equals higher premiums.
– Annual Payroll – For workers’ comp insurance, higher payroll signifies greater exposure. Payroll is used to calculate premiums, so as payroll rises so do costs.
– Safety Record – Poor OSHA records, lack of safety training, and frequent inspection violations suggests higher risks. Safer contractors pay less for insurance.
– Subcontractor Risk – Using uninsured subcontractors increases liability and workers’ comp risks. Requiring subs to carry insurance helps lower a contractor’s costs.
– Insurance Company – Premiums can vary significantly between insurance carriers based on things like financial strength, loss payout reputation, expertise, and competitiveness within the contractor space.
– Business Size – Insurance carriers often offer preferential pricing to larger contractors given their economies of scale and spread of risk. Small contractors pay more overall.
The key is to maintain excellent records, safety practices, business experience, risk transfer, and choose appropriate coverages to help minimize insurance costs. Controlling risk lowers premiums. An insurance professional can provide guidance to help reduce expenses.
Small, Medium, and Large Contractor Benchmarking
The table below provides a general industry benchmark based on typical contractor insurance coverages secured at each annual revenue level. This helps give you context on cost ranges at various business sizes.
| 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 trade type, location, safety record, number of employees and vehicles, payroll size, past claims, and more. 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 provided in the benchmarking.
If unsure about your specific insurance needs, we encourage you to consult with the highly skilled specialists within our contractor insurance network. These dedicated experts work daily to help contractors access top insurance markets and realize significant savings by tailoring coverage to the unique operations and risk profile of contractor businesses.
Typical General Liability Insurance Rates
General liability, also known as CGL, contractors liability, or third-party liability protects your business in the event a third party alleges property damage or bodily injury caused by your contracting operations or employees. It covers legal defense costs and settlements up to the policy limits.
| Low | High | Average | |
| Electrician | |||
| – Small | $1,000 | $2,200 | $1,400 |
| – Medium | $3,100 | $7,500 | $4,300 |
| – Large | $4,800 | $13,600 | $7,900 |
| Plumber | |||
| – Small | $4,100 | $10,800 | $7,100 |
| – Medium | $12,500 | $23,800 | $18,500 |
| – Large | $20,900 | $48,800 | $36,500 |
| Painter | |||
| – Small | $1,200 | $3,400 | $1,800 |
| – Medium | $2,500 | $6,300 | $5,100 |
| – Large | $3,800 | $13,400 | $9,600 |
| Landscaper | |||
| – Small | $1,091 | $2,025 | $1,500 |
| – Medium | $3,144 | $6,132 | $4,100 |
| – Large | $4,385 | $11,020 | $7,100 |
| Handyman | |||
| – Small | $2,100 | $4,200 | $2,800 |
| – Medium | $7,400 | $11,100 | $8,800 |
| – Large | $17,600 | $22,880 | $18,600 |
| Carpenter | |||
| – Small | $2,500 | $4,400 | $3,200 |
| – Medium | $8,600 | $12,900 | $10,000 |
| – Large | $15,500 | $25,300 | $20,700 |
| General Contractor | |||
| – Medium | $3,600 | $13,500 | $6,800 |
| – Large | $6,600 | $18,100 | $11,100 |
| – XL | $15,500 | $42,600 | $26,600 |
Typical policy limits for small to mid-sized contractors are $1 million per occurrence and $2 million aggregate. Larger contractors often secure higher limits.
Based on these coverage parameters, here are the typical premium ranges Wisconsin contractors will pay based on their annual revenue:
| Annual Revenue | Typical Premium Range |
|---|---|
| $100,000 | $1,500 – $7,500 |
| $250,000 | $3,750 – $18,750 |
| $500,000 | $7,500 – $37,500 |
| $1 million | $15,000 – $75,000 |
| $2.5 million | $37,500 – $187,500 |
So a Wisconsin contractor doing $500,000 in revenue can expect to pay between $7,500 to $37,500 annually for a $1 million per occurrence general liability policy.
These premiums equate to 1% to 7.5% of revenue, which is an industry norm for contractors given the hazards inherent to construction work.
The wide rate range demonstrates how factors like type of trade, experience, past claims, risk transfer, safety initiatives, and choice of insurance carrier can significantly swing pricing. Newer, riskier contractors will fall in the upper end of each revenue range. More experienced and safety focused contractors will secure rates near the lower end.
Variables Impacting General Liability Insurance Costs
Many variables influence general liability insurance premiums for Wisconsin contractors. Being aware of these key factors allows you to better manage risks and control costs:
– Trade Type – The specific contracting occupation has a large impact. Roofers, electricians, and plumbers pay more than painters or carpenters due to perceived hazards.
– Past Claims – Having past liability claims will increase renewal premiums. Multiple severe claims may make coverage unaffordable. A clean loss history helps lower rates.
– Years in Business – Newer contractors are viewed as higher risk and charged higher premiums by insurance carriers until they prove themselves. Longevity equals lower rates.
– Revenue – Higher revenues mean you have greater overall risk exposure. Insurance carriers use revenue to help calculate premiums, so more revenue can equal more premium.
– Experience Mod – This formula grades you on past workers’ comp claim history. Higher mods mean higher liability premiums as you’re seen as higher risk.
– Risk Transfer – Requiring subcontractors to carry insurance and securing performance bonds helps transfer risk. Taking these steps lowers premiums.
– Limits & Deductibles – Lower liability limits and higher deductibles reduce costs by shifting financial responsibility. But it may expose you to uncovered losses.
– Insurance Provider – An established insurance carrier with strong financials garners lower premiums versus new or unstable providers.
Typical Workers Compensation Rates
Workers’ compensation insurance covers medical expenses and a portion of lost wages for employees injured on the job. All Wisconsin employers are required to carry this coverage.
| Low | High | Average | |
| Electrician | |||
| – Small | $1,666 | $3,645 | $2,083 |
| – Medium | $4,686 | $10,310 | $6,248 |
| – Large | $7,290 | $16,142 | $10,414 |
| Plumber | |||
| – Small | $2,358 | $5,158 | $2,948 |
| – Medium | $6,632 | $14,591 | $8,843 |
| – Large | $10,317 | $22,844 | $14,738 |
| Painter | |||
| – Small | $2,703 | $5,914 | $3,379 |
| – Medium | $7,603 | $16,727 | $10,138 |
| – Large | $11,827 | $26,189 | $16,896 |
| Landscaper | |||
| – Small | $1,072 | $2,345 | $1,340 |
| – Medium | $3,015 | $6,633 | $4,020 |
| – Large | $4,690 | $10,385 | $6,700 |
| Handyman | |||
| – Small | $4,372 | $9,564 | $5,465 |
| – Medium | $12,297 | $27,053 | $16,396 |
| – Large | $19,128 | $42,355 | $27,326 |
| Carpenter | |||
| – Small | $5,497 | $12,025 | $6,872 |
| – Medium | $15,461 | $34,014 | $20,615 |
| – Large | $24,050 | $53,255 | $34,358 |
| General Contractor | |||
| – Medium | $13,116 | $28,691 | $16,395 |
| – Large | $20,494 | $45,086 | $27,325 |
| – XL | $38,255 | $84,708 | $54,650 |
For contractors, premiums vary based on payroll, job type, experience rating, claims history, and other factors:
| Annual Payroll | Typical Premium Range |
|---|---|
| $100,000 | $5,000 – $25,000 |
| $250,000 | $12,500 – $62,500 |
| $500,000 | $25,000 – $125,000 |
| $1 million | $50,000 – $250,000 |
| $2.5 million | $125,000 – $625,000 |
So for example, a Wisconsin contractor with a $500,000 annual payroll will typically pay between $25,000 to $125,000 in workers’ compensation premiums annually.
Wisconsin ranks among the more expensive states for workers’ comp costs due to high mandated benefits and rates. But contractor premiums can vary dramatically based on risk-influencing factors.
Variables Impacting Workers Comp Insurance Costs
Many variables influence workers’ compensation premiums for Wisconsin contractors. Being aware of these key factors allows you to better control risks and premiums:
– Payroll – The total annual payroll directly impacts workers’ comp premiums. Higher payroll equals greater exposure and higher premiums.
– Job Class – The hazard level of work performed is classified by risk. Roofers pay more than painters. Electricians pay more than plumbers. Office staff pay less than field employees.
– Experience Mod – This compares your past losses to other employers. Higher mods mean higher premiums. Good loss history leads to lower mods and premiums.
– Claims – Too many past claims will drive up premiums. Effective safety and injury management programs help lower costs.
– Premium Discounts – Discounts for drug testing, safety training, timely claim reporting, and other factors help lower premiums.
– Policy Limits – Higher coverage levels increase premiums but provide greater protection. Lower limits reduce costs but increase financial exposure.
– Deductible – Choosing a higher deductible reduces premiums but increases out-of-pocket costs when a claim occurs.
– Insurance Carrier – Some insurers specialize in contractor workers’ comp and provide discounted premiums and superior service.
Additional Contractor Insurance Coverages
Beyond general liability and workers’ compensation which all active contractors are required to carry, supplemental insurance policies are recommended to address other risks:
Commercial Auto Insurance
Covers vehicles used for business purposes. Typical premiums range from $800 – $2,500 per vehicle.
Commercial Property Insurance
Safeguards buildings, offices, warehouses, equipment, tools, and business personal property. Typical premiums range from $500 – $10,000 annually.
Inland Marine Insurance
Covers contractor tools, equipment, machinery, and materials on job sites and in transit. Typical premiums range from $750 – $3,000 annually.
Surety Bonds
Required for public works and many large projects. Bonds guarantee contract performance. Typical rates range from 1-3% of the contract price.
Employment Practices Liability
Protects against employment lawsuits. Typical premiums range from $1,500 – $4,000 annually.
Cyber Liability Insurance
Covers data breaches, hacking incidents, and electronic theft. Typical premiums range from $500 – $2,000 annually.
Excess Liability (Umbrella
Provides additional liability limits above other policies. Typical premiums range from $750 – $1,250 annually per $1 million in extra coverage.
Professional Liability
Covers damages if faulty workmanship leads to property damage or bodily injury. Typical premiums range from $2,500 – $5,000 annually.
Pollution Liability
Protects against claims alleging contractor work led to environmental damage or spills. Typical premiums range from $2,500 – $7,500 annually.
Builder’s Risk Insurance
Covers construction projects and buildings while under construction. Typical premiums range from 0.3% – 2% of the completed value.
This comprehensive mix of insurance coverages offers contractors protection tailored to the exposures and risks of the construction industry. An insurance specialist can guide you in structuring an optimal program.
Partnering With a Reputable Insurance Advisor
Trying to manage contractor insurance on your own can be challenging and time consuming given the many moving parts involved and importance of securing adequate and affordable coverage.
Most successful Wisconsin contractors partner with an expert insurance advisor who becomes an invaluable asset helping to:
– Analyze risks and exposures unique to contractor operations
– Structure insurance programs providing optimal protection
– Access top insurance markets providing tailored coverage at competitive rates
– Ensure compliance with state insurance requirements
– Provide ongoing policy maintenance including certificates of insurance
– Be available year-round to answer questions and discuss concerns
– Proactively advise on emerging contractor risks like cyber threats
Established independent agencies develop strong relationships with specialized insurance carriers. This provides contractors access to exclusive products and pricing unavailable through standard online platforms.
An experienced Wisconsin construction insurance broker understands the competitive local insurance landscape and leverages their expertise to maximize contractor benefits while minimizing premiums.
They take time to explain coverages in simple terms allowing you to make informed decisions. And they become trusted advisors helping you effectively manage risks impacting your business.
Why Choose Insurance4Contractors.com?
Insurance4Contractors.com possesses over 25 years of experience serving contractors across Wisconsin. Our advisors are deeply familiar with the unique risks facing contractors within the trades of construction, electrical, plumbing, excavation, HVAC, and more.
We’ve cultivated long-standing partnerships with top regional and national insurance carriers specializing in the needs of contractors. This extensive network allows us to provide tailored options combined with leverage to negotiate optimal rates.
Our Promise
– Trusted Expertise – Our advisors live and breathe contractor insurance and keep up to date on emerging risks in the construction industry. We’ll have the answers to all of your insurance questions.
– Choice – As an independent agency, we can access over 50 A-rated insurance carriers. That means we can shop your needs and get you the best coverage and rate options.
– Year-Round Support – We don’t just sell you a policy and disappear. We are here to serve you 365 days a year whenever you need contractor insurance guidance.
– Proactive Communication – We contact you ahead of renewal to discuss your needs so there are no surprises. And we provide ongoing education to help you manage risk.
Don’t leave your business exposed to risk or pay too much for inadequate insurance. The specialists at Insurance4Contractors.com have you covered.
Conclusion
Construction is a high-risk industry with serious hazards. Carrying proper insurance is crucial to protecting your contractor business in Wisconsin. Educating yourself on typical coverages and costs allows you to make smart insurance decisions.
But contractor insurance is complex. Trying to figure it out on your own can lead to mistakes that prove very costly down the road. Partnering with a reputable insurance advisor provides peace of mind knowing your risks are covered affordably.
The experts at Insurance4Contractors.com specialize in the needs of Wisconsin contractors. Contact us today to discuss your insurance needs and get premium estimates tailored to your business. We’re here to provide you with trusted advisor support and cost-effective insurance solutions to safeguard the future of your construction company.