3 Factors That Affect The Cost Of Contractor Liability Insurance
Any construction site poses a risk to the health and safety of a construction crew. Contractors need to have a comprehensive insurance policy in place to protect themselves against the financial ramifications of any worksite accident.
The cost of a contractor liability insurance policy can vary, so it's important that you understand some of the factors that can affect the price of these insurance policies.
An understanding of these factors will help you maximize your coverage while maintaining affordable premiums in the future.
1. Policy Coverage Limits
Contractor liability insurance policies can vary in cost based on the unique coverage limits included in the policy.
Coverage limits are critical because they outline how much an insurance company will pay in the event of an accident. The higher the policy coverage limits, the more expensive the premiums on the policy will be.
You should work closely with your insurance agent to evaluate the level of risk associated with your construction activities. This risk factor can help determine reasonable policy coverage limits that will maximize your protection.
The level of experience you bring to a worksite as a contractor can play a role in determining your liability insurance policy premiums. Insurance companies operate under the assumption that an experienced contractor is more likely to run construction sites in a way that reduces the risk of an accident.
A contractor with very little experience is considered a greater risk. To compensate for the higher risk, a new contractor can expect to pay higher monthly premiums for a liability policy than their more experienced counterparts.
3. Accident History
Another factor that will be used to determine the cost of your contractor liability insurance premiums is your company's accident history. A company that has a higher frequency of accident claims can expect to pay more than a company that goes many years without an accident claim.
Your insurance agent might request records from previous insurance providers before writing your new contractor liability insurance policy. These records will help establish your company's accident history and provide the lowest possible premiums on future policies.
Determining the cost of contractor liability insurance can be a complex process.
You should focus on increasing worksite safety through hands-on training, calculate the lowest policy limit coverage required to protect your company, and build your experience as a contractor if you want to keep your insurance premiums low in the future. Contact a company that offers contractor liability insurance to learn more.