In 2021, there were 2,960,139 small businesses in Texas, with 373,776 of these being in the construction industry, according to the U.S. Small Business Administration (SBA). Like any other industry, businesses in the construction industry face myriad risks, and this is where contractor insurance policies come into play. The cost of the necessary insurance policies will hinge on multiple factors, including your business risks, policy limits, and the cost of your equipment. Here is all you need to know about contractor liability insurance for Texas contractor businesses.
General liability insurance covers unexpected costs emanating from accidents that can affect your business. Most clients require contractors to carry this policy because they want the assurance that you can pay for liabilities that may result from damage and accidental injuries related to your work. As a general contractor, you can save on your general liability insurance costs by purchasing a (BOP) Business Owner's Policy, which combines commercial property insurance with general liability insurance. In Texas, the median cost of general liability policies, with a policy limit of $1 million, is about $ 1,090 annually or $90 monthly.
Workers Comp insurance protects your business as well as your employees from liabilities related to workplace illnesses and injuries. It can cover affected workers' lost wages, medical expenses, rehabilitation costs, and other expenses. In Texas, if your construction business has workers and your serve public employers, you must carry workers comp insurance. In Texas, you'll pay a median cost of about $3,175 annually or $265 monthly for workers' comp coverage.
Your commercial vehicle insurance policy protects your business-owned vehicles. It can also protect you and your workers when using personal vehicles for business purposes. It covers liability for personal injury and property damage resulting from auto accidents, weather damage, vandalism, and vehicle theft. Your personal auto policy won't cover damages if you're in an accident while driving for your business. The median cost of commercial auto policies, with a policy limit of $1 million, is $1,990 annually and $165 monthly.
Tools and equipment insurance covers your equipment, regardless of where you keep it, whether at your job sites, in a trailer, or your vehicle. It'll cover the cost of repair or replacement in case your tools are stolen, damaged, or lost. The median cost of tools and equipment coverage, with a policy limit of $5,000, is $170 annually or 15 monthly.
Professional liability coverage protects your business against negligence claims and civil lawsuits related to professional errors. This coverage can cover your legal expenses and the cost of compensating a client. The median cost of a professional liability policy, with a $3,000 policy limit, is less than $520 annually or $45 per month.
Surety bonds guarantee that your client will be reimbursed if you fail to do your work per your contract. Common surety bond variants include payment, performance, and bid bonds. The median cost of surety bonds, with a bond amount of $10,000, is about $100 annually and $8 monthly.
The costs mentioned above are based on recent industry studies. You should contact an independent insurance agency for more cost-effective and customized policies. At BEMA Insurance, we can help you get business insurance policies that'll adequately protect you and your contractor business. Contact us today!
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