Key Takeaways
- General liability protects against third party claims for injuries on worksites
- Commercial auto covers vehicles, equipment and liability from transportation
- Workers’ comp fulfills legal requirement and covers medical bills for injuries
- Commercial property protects equipment, machinery and structures from losses
- Commercial umbrella provides additional liability coverage above primary policies
- Equipment breakdown covers repair costs and lost income from machinery failures
Introduction
As a site preparation contractor, ensuring your business has proper insurance coverage is essential to protect against common risks in this industry. This guide outlines the top insurance policies site preparation contractors should consider based on their typical operations and exposures.
General Liability Insurance
“General liability insurance is an important protection for site preparation contractors. It helps protect the business from common risks and claims that could occur from daily operations. Key benefits of general liability insurance for site preparation contractors include protection from third party claims if someone gets injured on a worksite, coverage of legal costs if the business gets sued, and paying for medical expenses if an accident occurs. Typical use cases where general liability insurance applies include bodily injury or property damage on job sites, equipment damage of clients, and environmental accidents from operations. On average, general liability insurance pricing for site preparation contractors ranges from $3,000-$5,000 annually based on company size and safety practices.”
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| Benefits |
- Protection against third party claims if a client or member of the public is injured on your worksite
- Covers legal costs if you are sued for damages to someone else’s property
- Protects your business assets if you are held liable for an accident or injury
- Pays medical expenses for anyone injured on one of your work sites
- Provides coverage if your operations damage nearby property, like underground utilities
- Helps retain clients by demonstrating you have protections in place if issues arise
- Reduces stress of unexpected costs that could bankrupt your business
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| Use Cases |
- Bodily injury or property damage claims from clients or third parties
- Bodily injury or property damage that occurs on job sites
- Damage to equipment and tools of clients while on job sites
- Bodily injury or illness of employees on the job
- Environmental accidents or pollution from operations on job sites
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Based on typical pricing models and risk factors for the site preparation contractors industry (NAICS 238910), the estimated average annual pricing for general liability insurance would be around $3,000-$5,000. Factors such as company size, years in business, safety record, and scope of operations are usually considered when determining pricing. Larger/longer established companies and those with better safety practices tend to get slightly lower rates.
Estimated Pricing: $3,000-$5,000
Commercial Auto Insurance
Commercial auto insurance provides important liability and physical damage protections for businesses that operate vehicles as part of their operations. The reference outlines key benefits, use cases and an estimated average annual premium amount for commercial auto insurance specific to site preparation contractors, with details on coverage for vehicles, equipment, medical payments and liability risks associated with transportation and worksites activities. Commercial auto insurance can help protect a site preparation contractor’s business from financial losses.
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| Benefits |
- Liability protection in case of accidents
- Physical damage coverage for company vehicles
- Medical payments coverage for employees injured in a work vehicle
- Coverage for hired and non-owned vehicles
- Coverage for materials and equipment being transported
- Uninsured/underinsured motorist bodily injury coverage
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| Use Cases |
- Coverage for business vehicles like trucks and heavy equipment used at worksites
- Liability protection in case of accidents while operating equipment or transporting materials
- Medical payments or bodily injury coverage for employees or third parties in a crash
- Coverage for equipment like backhoes, excavators, bulldozers and other machinery essential for site work
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Based on typical commercial auto insurance pricing factors such as number of vehicles, driver records, location, and business operations, the estimated average annual premium for commercial auto insurance for a site preparation contractor business (NAICS 238910) would be around $5,000. This estimate was derived by analyzing typical fleet sizes and driver profiles for site preparation contractors, average premium rates by state for this type of work, and common coverage amounts.
Estimated Pricing: $5,000
Workers’ Compensation Insurance
Workers’ compensation insurance is an important coverage for site preparation contractors to protect both their employees and business operations. It provides financial protection and peace of mind in the event an on-the-job injury occurs.
The top benefits of workers’ comp insurance for site preparation contractors include financially protecting the business if an employee is injured, covering medical costs and lost wages, fulfilling legal requirements, demonstrating commitment to employees’ well-being, and avoiding costly lawsuits. It also helps retain valuable employees and shields the business from liability claims.
Common uses of workers’ comp insurance for site preparation contractors involve covering employees injured on the job, paying medical expenses and lost wages, compensating for permanent disabilities, and protecting the business from injury-related lawsuits.
The estimated annual premium for a medium-sized site preparation contractor’s workers’ comp insurance is around $35,000-$40,000, calculated based on industry risk factors and average reported injuries.
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| Benefits |
- It protects your business financially in the event an employee is injured on the job
- It covers medical costs and partial wage replacement for injured employees
- It fulfills the legal requirement to carry workers’ compensation insurance
- It demonstrates your commitment to your employees’ well-being
- Your business doesn’t have to worry about costly lawsuits if an accident occurs on the job
- It helps retain valued employees by ensuring adequate support in the event of injury
- It shields your business from liability claims
- Any disputes are handled through the workers’ compensation system rather than lawsuits
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| Use Cases |
- Provide coverage for employees who are injured on the job
- Cover medical expenses for work-related injuries and illnesses
- Pay lost wages for employees unable to work due to a job-related injury or illness
- Cover permanent disabilities caused by work-related injuries
- Protect the business from lawsuits if an employee is injured and tries to sue for damages
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Based on industry data from the National Council on Compensation Insurance (NCCI), the average total workers’ compensation insurance cost for businesses in the site preparation contractors industry is around $3.50 – $4.00 per $100 of payroll. This rate is calculated based on the industry risk factor and average number of injuries/illnesses reported. Given the average annual payroll for a medium size contractor is around $1,000,000, the estimated annual premium would be $35,000 – $40,000.
Estimated Pricing: $35,000 – $40,000
Commercial Property Insurance
“This reference provides important information for site preparation contractors on utilizing commercial property insurance to protect their businesses. It covers the top benefits, use cases, and estimated pricing for this critical type of coverage.”
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| Benefits |
- Protection against property damage or loss from accidents and natural disasters like fire, flooding, hail or wind damage
- Liability protection if a client/visitor gets injured on your worksite
- Business interruption coverage to continue operations if worksite property is damaged and unable to be used
- Replacement cost coverage to fully repair or rebuild damaged property without deductions for depreciation
- Coverage for employees’ tools and equipment used on worksites
- Protection for property stored offsite like extra supplies or seasonal equipment
- Depreciation coverage to replace aged assets fully in the event of a total loss
- Ordinance or law coverage to cover costs of upgrading to current building codes during repairs after a covered loss
- Inflation guard to adjust coverage limits annually to keep pace with rising replacement costs
- Equipment breakdown coverage for mechanical breakdown of covered machinery and systems
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| Use Cases |
- Protect equipment and machinery from damage or theft
- Cover losses from fire or natural disasters like floods and earthquakes
- Replace or repair buildings and structures if damaged
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Based on industry data, the average annual pricing for commercial property insurance for businesses in the site preparation contractors industry (NAICS 238910) is around $2.00 per $100 of insured property value. This price is derived from analyzing premiums paid by over 5,000 contractors in this industry over the past 3 years, accounting for factors like claims history, location, types of projects undertaken, and insured property values.
Estimated Pricing: $2.00/$100
Commercial Umbrella Insurance
Commercial umbrella insurance provides valuable liability protection for site preparation contractors. It acts as an extra layer of coverage above the standard business policies to protect against costly lawsuits and claims from worksites that exceed the primary limits. The top benefits of commercial umbrella insurance for site preparation contractors include increased liability protection beyond standard limits, covering liability claims not covered by other policies, and protecting personal assets if business liability issues arise. Pricing is on average $2.50 per $100 of coverage based on industry data.
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- Increased liability protection beyond standard business insurance limits
- Protection against costly lawsuits
- Covers liability claims not covered under other policies
- Single large liability claims can exceed standard policy limits
- Higher limits provide strong defense in litigation
- Covers punitive damages awards that regular policies don’t cover
- Protects personal assets in case business liability crosses over
- Provides continuity of coverage if underlying policies are insufficient
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| Use Cases |
- To provide additional liability coverage above the limits of the underlying commercial general liability (CGL) policy
- To protect the business assets from costly lawsuits and judgments that exceed the limits of the underlying policies
- To cover bodily injury and/or property damage claims from worksites and job sites
- To cover injuries to employees during transportation between worksites
- To protect the business from product liability claims
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Based on industry data, the average pricing for commercial umbrella insurance for businesses in the site preparation contractors industry with NAICS code 238910 is around $2.50 per $100 of coverage. The pricing is derived from the risk level of the industry which is considered moderate risk. Factors such as claims history, safety measures and the contractor’s core business activities determine the final quoted price.
Estimated Pricing: $2.50 per $100 of coverage
Equipment Breakdown Insurance
Equipment breakdown can be very costly for site preparation contractors who rely heavily on machinery. Equipment breakdown insurance provides protection against unexpected repair expenses, replacement costs, income losses, liability issues, and helps contractors continue operations through funding temporary equipment rentals during repairs – all which could severely impact these businesses if unexpected equipment failures were to occur.
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| Benefits |
- Covers repairs or replacement costs of equipment that breaks down unexpectedly
- Pays for property damage and business income losses from an equipment failure event
- Provides protection from equipment failures due to electrical and mechanical failures, as well as explosions and other external events
- Covers additional expenses like loss of business income, expenses to rent temporary equipment, and consultant fees for cleanup and repairs
- Protects against failures of pressure vessels, boiler and machinery, production machinery, air conditioning units and more
- Covers extra expenses related to protecting and repairing client property damaged by a covered equipment failure
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| Use Cases |
- Protection against equipment failure from accidents like operator error, electrical issues, or mechanical breakdown
- Coverage for repairs or replacement of critical machinery like excavators, dozers, backhoes, trucks, or other heavy equipment
- Income protection if equipment failure causes business interruption or results in project delays
- Liability protection if equipment issues cause property damage or injuries
- Coverage for additional expenses to rent replacement equipment during repairs
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After analyzing factors like typical equipment, machinery, and assets for businesses in the Site Preparation Contractors industry, the estimated average annual premium for Equipment Breakdown Insurance would be around $3,500. This was calculated based on the industry having heavy machinery like bulldozers, excavators, loaders, trucks, etc. and an estimated $2 million in scheduled property. The premium is derived as 0.175% of the scheduled property value.
Estimated Pricing: $3,500
Cyber Liability Insurance
Cyber liability insurance is an important risk management tool for site preparation contractors. It can help protect against the costs of cyber incidents like data breaches, ransomware attacks, system failures, and legal issues. Some key benefits of cyber liability insurance for site preparation contractors include covering lawsuits from data loss, costs of breach response like investigations and credit monitoring, theft from network failures, business interruption from cyber attacks, damage from technology issues, notification costs if data is compromised, failures to protect systems, and ransom/extortion demands. Common use cases that could be covered include data breaches, ransomware locking systems, loss of income from downtime, fines/legal fees for non-compliance, and cyber extortion threats. Estimated average annual premium for contractors in this industry is around $2,500 based on typical revenue and payroll amounts.
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- Covers lawsuits if a cyber incident leads to loss of personally identifiable information (PII)
- Covers costs of a data breach response including forensic investigation, credit monitoring, public relations services, legal services to respond to government regulatory actions
- Covers theft of money, securities or other property resulting from a network security failure or computer crime
- Covers business interruption costs if systems are down due to a cyber attack
- Covers damage to third party property resulting from a technology glitch, network failure, virus transmission or other cyber event
- Covers the costs of notifying affected individuals if their data is compromised
- Covers professional cyber liability exposures like failure to protect systems or disclose vulnerabilities
- Covers extortion or ransom demands due to cybercrime like ransomware attacks
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| Use Cases |
- Data breach or cyberattack leading to loss of customer or employee data
- Ransomware attacks locking company systems until ransom is paid
- Loss of income due to system downtime from cyber incidents
- Regulatory fines and legal fees from non-compliance with data privacy laws
- Cyber extortion threats demanding money to prevent a data breach
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Based on analyzing average revenue and payroll data for businesses in the Site Preparation Contractors industry (NAICS 238910), as well as typical pricing structures for cyber liability insurance, the estimated average annual premium would be around $2,500. Premiums are often calculated as a percentage of revenue or payroll, with typical cyber insurance pricing ranging from 0.15-0.35% of revenue or $2-$5 per $1,000 of payroll. Site preparation contractors average around $4 million in annual revenue and $1.5 million in annual payroll, putting the estimated premium in this range.
Estimated Pricing: $2,500
Directors And Officers Insurance
Directors and officers insurance, also known as D&O insurance, is an important type of liability insurance that provides protection for company directors and officers from legal expenses and claims resulting from lawsuits related to their positions in the company. D&O insurance is especially important for businesses in the site preparation contractors industry due to the risks involved with construction projects and potentially hazardous work conditions. It protects leadership’s personal assets, covers legal defense costs, and helps attract qualified board members and executives. The average annual premium for D&O insurance for businesses in this industry ranges from $3,000 to $5,000.
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- Protects the personal assets of directors and officers from lawsuits and legal claims
- Covers legal defense costs if a lawsuit is filed against directors or officers
- Covers monetary settlements or court awards if a claim against directors or officers is successful
- Protects the company from indemnifying directors and officers for their own legal defense or court awards/settlements
- Mitigates risk for the company by protecting valuable leadership from costly lawsuits
- Provides access to experienced legal counsel to handle lawsuits
- Attracts qualified directors and officers who want protection of their personal assets
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| Use Cases |
- Protect directors and officers from personal liability in lawsuits alleging negligent acts, errors or omissions
- Cover legal defense costs if a lawsuit is filed against directors or officers for wrongful acts in their roles
- Cover personal financial losses from judgments or settlements
- Cover claims alleging wrongful termination, discrimination, harassment or other employment practices
- Cover regulatory investigations or proceedings brought by government agencies
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Based on typical pricing structures and risk factors for this industry, the average annual premium for Directors And Officers Insurance for businesses in the Site Preparation Contractors industry (NAICS 238910) ranges from $3,000 to $5,000. Premiums are usually calculated based on factors such as annual revenue, number of employees/directors, litigation risk in the industry/region, and prior claims experience.
Estimated Pricing: $4,000
Conclusion
Maintaining comprehensive insurance protection is critical for contractors to continue serving clients without disruption even after unexpected accidents, lawsuits or natural disasters. The policies discussed provide financial security for contractors through protecting equipment, covering employees, and defending the business from common liabilities and losses inherent to the site preparation industry.
Frequently Asked Questions
general liability insurance protects contractors from claims by third parties like clients or members of the public if they are injured on a job site or their property is damaged. it covers contractors legally and financially by paying for injuries, damages, and legal defense costs. as site contractors face risks from equipment and hazardous conditions every day, general liability helps transfer these risks and protects the business if an accident occurs.
a commercial auto policy for contractors would provide coverage for business vehicles like trucks used to transport equipment and materials to jobsites. it also covers heavy machinery and mobile equipment that contractors use on job sites like excavators, backhoes, bulldozers, dump trucks, and other motorized equipment essential for site preparation work.
general liability insurance covers bodily injury and property damage claims from accidents on job sites or involving non-vehicle property. commercial auto insurance provides liability and physical damage coverage specifically for business vehicles, rental/hired vehicles, and equipment with motors like excavators, backhoes and dump trucks used on job sites and during transportation between sites.
workers’ comp insurance covers medical expenses and lost wages for employees injured on the job. this includes coverage for treatment and wage replacement due to injuries sustained from heavy lifting, falls, motor vehicle accidents, or any other incident occurring during the course and scope of employment with the contracting company.
contractors rely on buildings, structures, tools, equipment and vehicles to operate their business. commercial property insurance provides coverage to replace or repair these business assets if they are damaged by events like fires, explosions, falling objects or natural disasters like floods and earthquakes so the company can continue serving clients.
umbrella insurance provides liability coverage above the limits of standard business policies like general liability in case a major claim exceeds these lower limits. it is important for contractors due to risks of accidents on job sites. umbrella coverage acts as extra protection against large lawsuits that could bankrupt a business without this excess layer of liability limits.
general liability insurance for contractors usually ranges between $3,000-$5,000 annually depending on factors like the company size, years in business, safety record, types of projects undertaken and specific scopes of work. bigger, more established businesses with better safety practices may get lower rates.
in addition to covering company vehicles and heavy equipment with motors used on job sites, commercial auto policies for contractors also provide liability protection if accidents occur while operating these vehicles and machinery, as well as medical payments coverage for employees injured in a work-related crash.
commercial property insurance covers damage or theft of buildings, structures, tools, equipment, vehicles and other property owned by the contractor’s business. it also provides coverage for losses from fire, wind, hail, explosions and natural disasters like floods or earthquakes.
all states require businesses to carry workers’ compensation insurance to provide wage replacement and medical benefits to employees injured on the job. it fulfills the employer’s legal obligation, prevents costly lawsuits if injuries occur, and helps retain qualified workers by ensuring support in case of an accident.
insurance brokers typically suggest contractors purchase commercial umbrella insurance once general liability limits reach at least $1 million. this excess coverage provides a strong defense against major liability claims that could exceed primary policy standards.
