Hi, this is Mike from Fusco Orsini & Associates. Here’s a question we get all the time.
How much does a general liability policy cost for a general contractor?
That’s a tricky question to answer without knowing more specifics about the general construction company, but here are some tips to keep in mind.
FACTORS THAT DETERMINE THE COST OF YOUR POLICY
Suppose you’re a smaller contractor (let’s say you’re a single owner) and employ one or two workers, and you subcontract about 50% or less of your gross sales. In that case, your policy may cost $1,200 to $3,500 per year, depending on the type of operations you perform, your geographical location, and the exclusions and endorsements included.
Let me explain further. Suppose your operations include room additions, structural remodels, roofing, foundation work, or standalone door and window installation. In that case, you’re going to pay more than the contractor that’s performing interior kitchens and bathroom models, some finished carpentry work, and that type of operation.
Exclusions are an essential factor when it comes to the cost of the policy. At our agency, we like to ensure that our customers don’t have subsidence exclusions, action over exclusions on their policy, or prior work exclusions. We want to ensure that they have appropriate endorsements, especially additional named insured endorsements if they need them to get on a project.
THE PRICING MODEL DIFFERS FOR LARGER CONTRACTORS
If you’re a larger general contractor, the cost is typically always determined by gross sales. So, let’s say you’re two million to three million dollars in gross sales. If you’re focused on commercial work, you’re looking at three to four dollars per thousand of sales on your rate. If you’re in residential, you’re looking more like five to six dollars. And if you’re performing new residential, such as custom homes, tract homes, condominiums, and townhomes, you’re going to have a more expensive policy than most. All of these factors determine the price of your general liability policy.
ADDITIONAL OPTIONS TO CONTACT US
If you’re a general contractor and you’d like to speak a little more, understand more about what I’m talking about, you can call us at (858) 384-1506. You can also reach me directly at mike@foagency.com. We have several years of experience ensuring contractors. It’s a lot of what we do here every day at our agency, and we’re happy to help you out and get you the right policy at the correct cost. Thanks for watching, and we’ll see you soon.
