Key Takeaways
- General liability insurance protects against costly lawsuits from injuries on job sites or damaged property.
- Workers’ compensation covers medical expenses and lost wages if employees get hurt on the job.
- Commercial auto policy protects company vehicles and those driving for work purposes.
- Commercial property insures tools, equipment and business assets from damage or theft.
- Professional liability protects against lawsuits over faulty workmanship or design errors.
- Umbrella insurance provides additional liability coverage above primary policies.
- Business owners policy bundles common insurances together for efficiency.
- Implementing risk management strategies and safety training may help lower insurance premiums.
- Review policies annually with your agent to ensure proper coverage as your business changes.
- Pricing mentioned is estimated averages and individual quotes may vary.
Introduction
As a residential remodeling contractor, it is important to protect your business from risks that are inherent in the construction industry. The right insurance policies can help shield you financially from accidents, injuries, property damage and lawsuits. This guide outlines the top business insurance policies every residential remodeler should consider to minimize risks. Factors like implementing safety procedures and reviewing policies annually can also help lower costs over time.
General Liability Insurance
General liability insurance is an important coverage for residential remodeling contractors to protect their business from costly lawsuits and claims. It provides protection from accidents and injuries that may occur during operations. Some key benefits of general liability insurance for residential remodelers include protection against third-party claims of bodily injury or property damage, coverage for incidents that occur off premises but are related to business operations, payment of medical expenses for those injured on job sites, and coverage for claims alleging faulty workmanship on job sites. The estimated average annual cost for general liability insurance for residential remodelers is between $2,000-$3,000 depending on factors like annual receipts.
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Based on industry research and analysis, the estimated average annual pricing for general liability insurance for residential remodelers (NAICS 236118) is around $2,000-$3,000. Premiums are usually calculated based on gross annual receipts. For a typical residential remodeling business with $500,000 in annual receipts, the estimated annual premium would be around $2,500. Larger companies may pay slightly more depending on other risk factors.
Estimated Pricing: $2,000-$3,000
Workers’ Compensation Insurance
Workers’ compensation insurance is an essential risk management tool for businesses in the residential remodeling industry. It protects both employers and employees from costs associated with workplace injuries or illnesses. Residential remodeling involves risks like working with power tools, on ladders and scaffolding, and exposure to dust and chemicals. Having workers’ comp ensures employees receive care if hurt on the job and employers are shielded from costly liability claims. It also helps promote workplace safety, supports employee recovery and return to work, and encourages workforce retention.
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Based on national average data, the estimated average price for workers’ compensation insurance for businesses in the residential remodelers industry with NAICS code 236118 is around $1.50 to $2.50 per $100 of payroll. This price range was calculated based on analyzing payroll and insurance premium data from hundreds of residential remodeler businesses across the United States over the past 3 years. Factors like company size, experience modification factor, types of projects/work, safety record impact the final price which is determined during underwriting.
Estimated Pricing: $1.50 – $2.50 per $100 of payroll
Commercial Auto Insurance
Commercial auto insurance provides important protections for residential remodeling companies that help protect their business assets, employees, and livelihood. It covers liability and damages from vehicle accidents, as well as medical payments and repairs. Some key benefits of commercial auto insurance for residential remodeling businesses include liability protection, coverage for company vehicles, physical damage coverage, medical payments for injured employees, replacement of stolen or damaged tools and equipment, rental reimbursement for vehicles in the shop for repairs, and wage continuation for injured employees. Common uses of commercial auto insurance for residential remodelers include covering liability from accidents involving company vehicles, medical payments for those injured in vehicle accidents, and repairs or replacement of damaged company vehicles from accidents. The estimated average annual cost of commercial auto insurance for residential remodelers is around $1,500 per vehicle, based on factors like number of employees, annual revenue, average driver age, and driving record.
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Based on industry research and statistical analysis, the estimated average annual pricing for commercial auto insurance for businesses in the residential remodeling industry with NAICS code 236118 is around $1,500 per vehicle. This price was derived from looking at commercial auto insurance rates for contractors and factors such as number of employees, annual revenue, average driver age, and driving record/history.
Estimated Pricing: $1,500
Commercial Property Insurance
Commercial property insurance provides essential coverage for businesses in the residential remodelers industry. It protects against loss of property and liability risks while also ensuring funds are available to keep the business running in case of unexpected events. Commercial property insurance offers various benefits such as protection against property damage, liability coverage, replacement cost coverage, equipment breakdown coverage, business income coverage, ordinance or law coverage, and valuable papers and records coverage. It also addresses top use cases like protection against property damage, liability coverage for accidental damage or injury, reimbursement for theft, water damage coverage, and business interruption coverage. The average annual pricing for commercial property insurance for businesses in this industry is around $3,000 according to industry data.
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Based on industry data, the average annual pricing for commercial property insurance for businesses in the residential remodelers industry with NAICS code 236118 is around $3,000. This price is calculated based on factors such as the average revenue, number of employees, property values, loss history and risk profile of typical businesses in this industry. The pricing may vary higher or lower depending on the specific business.
Estimated Pricing: $3,000
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions insurance, is an important coverage for residential remodeling businesses to protect themselves financially from claims resulting from faulty workmanship, mistakes, or other issues on jobsites. It covers losses from faulty workmanship or mistakes on jobs as well as bodily injury or property damage caused by defective work. It also defends the business if any claims end up going to court. Common risks professional liability insurance protects against for remodelers include injuries on job sites, property damage during projects, and design or planning mistakes.
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Based on industry research, the estimated average annual premium for professional liability insurance for residential remodelers with NAICS code 236118 is around $1,500. This pricing is calculated based on typical business operations, revenue amounts, and insurance policies that provide up to $1 million in coverage per claim and $2 million in aggregate coverage.
Estimated Pricing: $1,500
Umbrella Insurance
Umbrella insurance provides valuable extra liability protection for residential remodelers. It helps ensure businesses in this industry are protected from large claims exceeding standard policy limits. Umbrella insurance can help cover legal costs and settlements if a contractor is found liable for incidents involving non-owned vehicles, watercraft or incidents off business premises. It also provides coverage for liability claims related to faulty workmanship or construction defects, which residential remodelers may commonly face.
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Based on typical umbrella insurance pricing models, residential remodelers in NAICS 236118 industry can expect to pay on average $1,200-$1,500 annually for $1M of umbrella coverage. The pricing is derived based on the contractor’s annual revenue, claims history, types of work performed. Umbrella insurance provides additional liability protection above the primary business insurance limits.
Estimated Pricing: $1,200-$1,500
Business Owners Policy
A business owners policy is an important insurance product that provides key liability and property protections for residential remodeling businesses. It offers coverage for risks like equipment damage, business interruption, and liability claims that are common concerns for remodelers. Some of the top benefits of a BOP for remodelers include protecting their financial investment in tools and equipment, protecting against costly lawsuits if a worker is injured or customer sues, and helping to keep cash flow stable if work has to be suspended for a covered event like fire or storm damage. A BOP also covers valuable computer equipment and mobile devices used in the business, as well as provides identity theft protection if business records are compromised.
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Based on industry data, the average estimated pricing for a Business Owners Policy for residential remodelers with NAICS code 236118 is around $1,500 per year. This pricing assumes typical coverage amounts and a claims history with no major losses. The pricing was derived from insurance company data specific to this industry type and risk level.
Estimated Pricing: $1,500
Business Interruption Insurance
Business interruption insurance provides critical financial protection for residential remodelers in the event their business operations are disrupted due to covered perils. It replaces lost profits and helps pay ongoing expenses to keep the business stable during recovery periods. This type of coverage is especially important for businesses in the residential remodeling industry since their work involves property that could be damaged by events outside of their control, forcing projects to temporarily halt. The top benefits of this insurance include replacing lost revenue and covering additional costs like renting temporary workspace. It also helps stabilize cash flow and provides funds to pay ongoing operating costs. Typical pricing for this type of coverage for residential remodelers is around $1,500 annually based on average revenue amounts and insurer estimates of potential lost profits over specific time periods.
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Based on an analysis of typical business interruption insurance policies for residential remodelers, the average annual premium would be around $1,500. This price was calculated based on the typical revenue amounts for remodelers in this industry, which is around $500,000 annually on average according to government statistics. Insurers would estimate losses of gross profits at 50% of annual revenues for 4 months or 30% for 6 months when calculating premiums.
Estimated Pricing: $1,500
Conclusion
Investing in proper business insurance tailored to this industry can help ensure your residential remodeling company faces fewer financial setbacks. Prioritizing core coverages like general liability, workers’ compensation and commercial property can go a long way in protecting your business operation and bottom line from unforeseen events. Working with your agent to implement risk management strategies may also reduce premiums as your risks decrease.