Key Takeaways
- General liability insurance protects against legal costs and lawsuits from on-site injuries or property damage claims
- Workers’ compensation provides medical care and wage replacement for injured employees
- Commercial property coverage protects owned equipment, tools and materials from losses
- Commercial auto insurance covers vehicles used for business and hired/non-owned auto exposure
- Umbrella/excess liability expands coverage above primary limits for major claims
- Professional liability/E&O shields against negligence claims regarding work quality
Introduction
As a siding contractor, it is important to have adequate insurance protection in place to manage risks inherent to the construction industry. Several key types of coverage should be considered including general liability, workers’ compensation, commercial property/inland marine, commercial auto and professional liability.
General Liability Insurance
General liability insurance is an important protection for siding contractors. It can help protect the business financially from lawsuits and legal claims that may occur through daily operations and job site risks. Common risks include accidentally damaging a home or property during siding work, injuring workers on the job site, or negligence that results in accidents. This type of insurance helps transfer these risks to the insurance company and provide protection from lawsuits. Based on analyzing several major insurers’ pricing for general liability insurance for siding contractors, the estimated average annual premium is around $2,000. This is derived from estimating several factors like average payroll, number of employees, years in business, loss history, and types of work done. Rates may vary depending on individual business specifics.
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Based on analyzing several major insurers’ pricing for general liability insurance for siding contractors, the estimated average annual premium is around $2,000. This is derived from estimating several factors like average payroll, number of employees, years in business, loss history, and types of work done. Rates may vary depending on individual business specifics.
Estimated Pricing: $2,000
Workers Compensation Insurance
Workers compensation insurance is an important protection for siding contractors and their employees. It provides benefits and compensation for employees injured on the job, protects business owners from lawsuit costs, and is required by law in most states. The average annual premium for workers compensation insurance for siding contractors is between $1.50 to $2.00 per $100 of payroll due to the risks involved in the industry such as working at heights and using power tools/equipment.
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The average price for workers compensation insurance for siding contractors is between $1.50 to $2.00 per $100 of payroll. This rate is derived based on industry risk factors and average claims for this type of business. Siding installation has some risks involved with working at heights and using power tools/equipment which impacts the pricing. The final price will depend on individual business factors like experience, safety record and payroll amount.
Estimated Pricing: $1.50-$2.00/100 of payroll
Commercial Property Insurance
“Commercial property insurance is an important risk management tool for siding contractors. It provides several key benefits:
Property insurance protects a contractor’s investments in equipment, vehicles, tools, materials and other business property from losses due to theft, damage or accidents. It also covers liability if a contractor’s work causes property damage to a client. Coverage for temporary structures, business interruption and replacement cost help contractors continue operating smoothly after a covered loss event. Commercial property policies are often required for contractors to legally conduct business in many areas as well. Estimated average annual pricing for property insurance for siding contractors is around $2,500 according to industry data.”
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Based on industry data and typical commercial property insurance policies, the estimated average annual pricing for businesses in the siding contractors industry with NAICS code 238170 is around $2,500. This estimate was derived considering average property values, property protection class, and typical commercial policy coverages for general liability, property, and workers’ compensation. The pricing can vary depending on individual business factors like number of employees, claims history, and location.
Estimated Pricing: $2,500
Commercial Auto Insurance
“Commercial auto insurance provides essential liability and physical damage protection for siding contractors. It helps cover risks associated with using vehicles for business purposes.”
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Based on industry data and average risks, the estimated annual pricing for commercial auto insurance for siding contractors with NAICS code 238170 is around $1,500 per vehicle. This price assumes three vehicles on the policy (e.g. two trucks and one van) and is calculated based on average rates for liability coverage, collision coverage, and other standard commercial auto policy features for a business in this industry operating in most parts of the United States.
Estimated Pricing: $1,500
Commercial Umbrella Insurance
Commercial umbrella insurance provides additional liability protection above and beyond a business’s primary general liability insurance. It is especially valuable for siding contractors due to the risks involved with construction work. Umbrella insurance can help protect a contractor’s assets and limit financial liability in the event of large lawsuits from property damage, injuries on job sites, or other incidents. It also ensures the contractor’s entire liability exposure is covered.
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Based on typical industry standards and liability exposure for siding contractors, the estimated average annual pricing for a $1 million commercial umbrella insurance policy would be approximately $750-$1,000. Pricing is dependent on factors like annual revenue, number of employees, claims/loss history, and types of projects. Contractors with over 10 employees and $1-2M in annual revenue would likely pay towards the higher end of the range.
Estimated Pricing: $750-$1,000
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions insurance, provides important protection for siding contractors by covering lawsuits related to negligent work. It protects a contractor’s business and personal assets from costly claims arising from issues like faulty workmanship, use of defective materials, installation errors, and other professional negligence that may not be apparent for years. The reference material discusses the top benefits of professional liability insurance for siding contractors including covering legal costs and damages from lawsuits regarding faulty workmanship, protecting against claims of defective products and materials used, covering costs to replace or repair defective work, and more. Estimated pricing for a medium-sized siding contractor is also provided.
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Based on typical insurance rates for siding contractors, the average estimated annual premium for professional liability insurance would be between $1,500 to $3,000. Rates are calculated based on factors like annual revenue, number of employees, loss history, and type of work. For a medium sized siding contractor with $2 million in annual revenue, 10 employees, and no major claims over the past 5 years, an estimated annual premium would be around $2,250.
Estimated Pricing: $2,250
Conclusion
By understanding their unique exposure areas and properly insuring against them, siding contractors can focus on operating their business productively while ensuring financial protection from unexpected losses.