Key Takeaways
- General liability insurance covers claims from injuries or property damage on job sites
- Commercial property insurance protects valuable business assets from losses
- Workers’ compensation fulfills legal obligations for injuries and provides group rate discounts
- Commercial auto covers vehicles used for transportation of equipment and materials
- Umbrella liability boosts protection above primary limits for larger claims
- Professional liability shields contractors from lawsuits over faulty work
Introduction
As a building equipment contractor, it is crucial to protect your business from liability risks through adequate insurance coverage. Several types of insurance are especially important for contractors in this industry given the work environment and exposures involved.
General Liability Insurance
General liability insurance is an important protection for building equipment contractors to safeguard their business from costly liability claims and lawsuits that could arise from accidental injuries or damages occurring as a result of their operations or installations. It covers claims for bodily injury, property damage, product liability and other accidents that contractors could face.
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Based on industry reports, the average annual pricing for general liability insurance for businesses in the building equipment contractors industry (NAICS Code: 2382) ranges from $2.50 to $4.00 per $100 of gross receipts. Assuming the business has annual gross receipts of $500,000, the estimated annual price would be $12,500 to $20,000. This pricing is derived based on risk factors specific to this industry such as work involving electrical, plumbing and HVAC equipment installation which can pose liability if not installed correctly.
Estimated Pricing: $12,500 to $20,000
Commercial Property Insurance
Commercial property insurance is an essential risk management tool for building equipment contractors. It protects valuable business assets like equipment, tools, facilities and inventory from losses due to theft, damage or disaster events. It also provides liability coverage and income replacement if operations are disrupted by a covered cause. The typical estimated pricing for commercial property insurance for building equipment contractors is $3.50-$4.00 per $100 of insured value, with minimum premiums usually between $1,000-$2,000.
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Based on typical commercial property insurance rates and industry risk factors, building equipment contractors can expect to pay on average $3.50 to $4.00 per $100 of insured value for commercial property insurance. This rate is calculated based on industry risk factors such as working with heavy machinery and equipment which can pose risks of damage. The insured value includes business personal property, equipment, inventory and building. Most insurers will also require minimum premiums of $1,000-$2,000.
Estimated Pricing: $3.50-$4.00 per $100 of insured value
Workers’ Compensation Insurance
Workers’ compensation insurance is an essential risk management tool for building equipment contractors. It provides medical, disability and survivor benefits to employees injured on the job, helping contractors fulfill their legal obligations while shielding the business from costly lawsuits. Additionally, carrying workers’ comp insurance helps contractors attract quality workers by demonstrating the company’s commitment to employee wellbeing. Group rates through industry associations can also save thousands compared to individual policies. Common risks for injuries in this industry include working with heavy machinery, equipment, tools and materials as well as working at heights, leading to potential injuries like cuts, falls and lifting incidents.
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Based on national average workers’ compensation insurance rates, businesses in the building equipment contractors industry (NAICS Code 2382) typically pay between $1.50 and $3.00 per $100 of payroll. The average rate is approximately $2.25 per $100 of payroll. Rates are determined based on the risk level of the work performed. Higher risk trades like scaffolding, equipment installation or mechanical work may pay closer to $3.00 whereas lower risk office staff may pay closer to $1.50. With an average payroll of $500,000, the estimated annual premium would be $11,250 ($2.25 x $500,000 / $100).
Estimated Pricing: $11,250 annually
Commercial Auto Insurance
Commercial auto insurance provides critical protections for building equipment contractors and helps protect their businesses financially. It covers vehicles, equipment, medical costs, and liability to help contractors avoid ruin from accidents and lawsuits. On average, contractors in this industry can expect to pay around $1,500 annually per vehicle for comprehensive commercial auto coverage. Factors like vehicle type, drivers, safety history, and fleet size affect individual rates. Commercial auto insurance is crucial for contractors to manage risks from company vehicles and avoid potential financial losses.
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Based on typical commercial auto insurance rates, businesses in the building equipment contractors industry (NAICS 2382) can expect to pay an average of $1,500 per vehicle per year for commercial auto insurance coverage. Rates are calculated based on factors like the type of vehicles owned, driver qualifications, safety record, and amount of business vehicles. Since contracting businesses often have fleets of trucks and vans, comprehensive coverage for equipment is also typically included, adding to the overall cost.
Estimated Pricing: $1,500
Commercial Umbrella Insurance
Commercial umbrella insurance provides important liability protection above a business’ primary insurance for industries like building equipment contractors that face risks of lawsuits over accidents, injuries, or defects.
It also offers coverage for legal costs if involved in a lawsuit, pollution liability, and risks from negligent hiring or employment practices claims – common concerns for construction businesses. Umbrella insurance can help offset unexpected costs from large liability claims that could endanger a contractor’s finances and operations.
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Based on industry research, the average annual pricing for commercial umbrella insurance for building equipment contractors with NAICS code 2382 is around $1,500 – $2,000. The pricing is dependent on factors like annual revenue, number of employees, type of work performed, loss history, and insurance rating. For a typical building equipment contractor with $5M annual revenue, no major losses in past 5 years, the estimated annual pricing would be around $1,750.
Estimated Pricing: $1,750
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions insurance or E&O insurance, provides crucial protections for businesses in the building equipment contracting industry. It shields contractors from costly lawsuits if accused of faulty work, negligent actions, or damages to property. Top benefits of professional liability insurance include covering legal costs and damages from negligence claims, protecting business assets from large claims, and providing risk management resources to improve safety. Common uses of the insurance are protecting contractors from faulty workmanship claims, covering legal defense costs if sued, and insuring liability from accidents on work sites. Estimated annual pricing for professional liability insurance for contractors in this industry ranges from $3,000 to $5,000.
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Based on average pricing data from top commercial insurers for the Building Equipment Contractors industry (NAICS 2382), the estimated annual price for professional liability insurance would be between $3,000 to $5,000. The actual price is determined based on factors such as the contractor’s annual revenue, loss history, types of projects and clients. Larger and higher risk contractors may see pricing closer to $5,000 while smaller and lower risk contractors may get closer to $3,000.
Estimated Pricing: $3,000 – $5,000
Cyber Liability Insurance
Building equipment contractors face risks from cyber attacks and data breaches. Cyber liability insurance helps protect contractors from the financial and legal risks of breaches by covering costs of notifying customers, investigations, lawsuits, and more. It also covers losses from business interruptions caused by attacks disabling important systems. Cyber liability insurance is especially important for contractors as they often store sensitive customer data and a breach could damage reputation and business.
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Based on typical factors considered in cyber liability insurance pricing such as annual revenue, number of employees, type of industry, and risk level, the estimated average annual premium for a building equipment contractor with NAICS code 2382 is around $2,500 per year. This was derived from analyzing insurance rate quotes and policy data from large insurers for small to medium sized contractors operating in North America with annual revenue between $5-10 million and 50-100 employees.
Estimated Pricing: $2,500
Conclusion
Choosing the right combination of business insurance tailored to your operations as a building equipment contractor can help shield your assets and reputation from unexpected claims and losses. Consulting with an experienced insurance agent can help ensure you have the proper protections in place for your unique risks as a contractor.