PA Contractor Insurance: What You Need to Know
Depending on your work, general contractors are required to acquire specific types of business insurance.
If your business is a contracting company, you need contractor insurance in PA. If your business owns a vehicle, you need commercial auto insurance to comply with the state requirements.
If your business has a physical location where you pay for the commercial lease, you may be required to acquire general liability coverage. Contractors in Pennsylvania commonly own it as this type of business insurance can protect the business from common risks such as property damage and trauma.
Another general contractor insurance in PA that every small business should provide is workers’ compensation insurance. This business insurance covers lost wages and medical bills for work-related injuries.
Depending on your clients or your work type, you may need contractors insurance or surety bonds.
Here’s everything you need to know about PA contractor insurance.
Does PA Require Contractors to Be Licensed?
The state law in Pennsylvania requires that every small business with employees must have workers’ compensation insurance. This policy covers lost wages and medical bills in case an employee gets injured on the premises.
Why Do I Need PA Contractor Insurance?
Pennsylvania contractor insurance is important if you or your employees cause damage to a client’s personal property and the client decides to file a claim against you. In this situation, a policy could cover the legal fees and save you from paying a lot of money. Another good example where PA contractor insurance would be useful is if, for example, someone steals materials from your truck. Building materials are not cheap, and covering the loss from your own pocket could be a significant hit to your finances if you don’t have a suitable insurance policy to protect you.
Who Needs Contractor Insurance in PA?
Contractors in all industries usually carry the same types of contractors insurance policies, but some professionals would especially benefit from having this type of coverage, such as:
- General contractors
- Uninsured subcontractors
How Much is Contractor Insurance in PA?
There are several factors that impact the PA contractor insurance cost, including:
- The type of policy
- Your policy limits
- Business risks
- The value of the equipment
General Liability Insurance Costs for General Contractors
A general contractor pays a median premium of $90 per month or $1,090 annually for general liability insurance. This coverage protects your business against third-party injuries, property damage, and advertising damages. General contractors can save money by acquiring general liability insurance with commercial property insurance.
- The median cost per year: $1,090
- Policy limit: $1 million per occurrence
- Policy deductible: $500
Workers’ Compensation Insurance Costs for General Contractors
For worker’s compensation insurance in PA, general contractors pay $265 per month or $3,175 per year. Most states require this business insurance, including PA for businesses and employee benefits, to cover their medical fees and lost salaries due to occupation-related injuries.
Contractor’s Tools and Equipment Insurance Costs for General Contractors
The median premium for general contractors insurance is about $15 per month or $170 per year for contractor’s tools and equipment insurance. This business insurance policy covers repairing or replacing lost, stolen, or broken devices and equipment.
- The median cost per year: $170
- Generic policy limit: $5,000
Professional Liability Insurance Costs for General Contractors
General contractors insurance median premium is a maximum of $45 per month or $520 annually for professional liability insurance in PA. This form is known as errors and omissions insurance to protect against client lawsuit claims on unsatisfactory, negligence, late, or unfinished work.
- The median cost per year: $520
- Policy limit: $300,000 per occurrence
- Deductible: $2,500
The cost of liability insurance coverage for independent contractors is not fixed. It can depend on your:
- Risk exposure
- Business location
- Policy information, i.e., your insurance coverage limits and deductible amount
Since independent contractors have no one-size-fits-all liability insurance, it is best to work with a local insurance company or ask for quotes from different insurers.
How to Lower the Costs of PA Contractor Insurance Premium
- Do Your Research: You can start by researching insurance packages. You can choose the policy that will cover the most common risks depending on your personal needs.
- Know Your Risks: When you apply for a policy, the insurance company measures the information from the application against the “acceptable risk” generated by an underwriter. If you need help deciding how much insurance to purchase, it’s always a good idea to discuss it with an experienced insurance specialist.
- Shop Around: While insurance costs vary, some providers specialize in specific types of businesses, including independent contractors. When looking for the best insurance package, it’s always recommended to shop around and check two or three options before making the final decision.
- Increase deductibles: If you’re in a position to assume additional risks, you could save on premiums by raising the deductibles.
- Safety first: If you emphasize safety by offering safety training and getting protective equipment for everyone at work, you can reduce the risks of accidents and lower your insurance premium.
Do Independent Contractors Need Liability Insurance?
You must have the right insurance for contractors. Like other small business owners, you can get sued immediately, and liability claims can be pricey. If you are not covered, and a client sues you, you must pay out of pocket. And that may cost enough to close your business.
An independent contractor liability insurance is provided to help your business from specific liability claims.
Types of Contractor Insurance Coverage in PA
Owning a contracting business comes with risks. There are many possibilities for people to incur injuries or properties to sustain damage. Physical injury or property damage happens in the work area, and the contractor will receive the end of a claim, which they have to pay out of pocket. But if they have the proper coverage that protects a business against liabilities.
Commercial General Liability Insurance
Commercial general liability coverage is one of the contractors’ most common types of insurance. It covers claims for physical injury or property destruction on a job site. Aside from covering the compensation, it also covers the legal expenses spent during litigation.
Workers’ Compensation Insurance
Workers’ compensation insurance cover employees from work-related accidents. Among the expenses covered by this business insurance are medical treatment, disability income, rehabilitation costs, and compensation to the families in case of death. Workers’ compensation is a necessary protection against third-party suits filed by the employees or their families.
Contractors Pollution Insurance
Due to strict environmental laws, especially the risk of pollution, builders are vulnerable to getting sued for violation of environmental laws whenever there is a builders project. Contractors’ insurance protects builders from such claims.
Automobile Liability Insurance
The owner of the vehicles used to transport materials, equipment, and workers to the construction is liable to compensate the employee or their families in case of damage to the property, injuries, or death at the construction site that may have been caused by the vehicle. Auto liability insurance protects builders against such claims.
Commercial Auto Insurance
A commercial auto insurance policy coverage in PA protects vehicles a general contracting company owns. It protects against property damage and covers medical bills in case of an accident, vehicle theft, weather-incurred damage, and vandalism.
Builders Risk Insurance
Materials and equipment can be lost, stolen, or damaged in a construction project. Hence, builders’ risk insurance is provided to protect the builders from these possible losses. It is provided along with general liability insurance coverage.
Roofers insurance is a type of general liability insurance that protects roofing contractors in case of workplace accidents that could lead to physical injury of the workers or damage to the property. Since the roofer’s work is way above the ground, the risk of accidents is higher.
What PA Contactor Insurance Doesn’t Cover?
Despite its extensive coverage, there are a few things that Pennsylvania contract insurance doesn’t cover, including:
- Damages to your property
- Intended damage
- Vehicle damages
- Professional errors
The Most Common Policies for General Contractors in Pennsylvania
In PA, the most general contractors opt for these insurance policies:
- General liability insurance
- Pennsylvania workers’ compensation
- Commercial auto insurance
- Contractor’s tool and equipment insurance
- Professional liability insurance
- Surety bonds
- Builder’s risk insurance
Do Contractors Need Insurance in PA?
If you are a construction business owner in Pennsylvania, you must have workers’ compensation insurance for your employees. Having contractor insurance in Pennsylvania is important as it can help you pay for medical bills in case an employee gets injured while doing their job.
How Do I Find Out If a Contractor is Insured in PA?
If you want to find out whether your contractor in Pennsylvania is licensed, you can search for them in the Home improvement Consumer Information database. You can find the information you are looking for by entering the contractor’s business name, location, and license number.
The Bottom Line
PA contractors insurance is important as it helps you pay for unexpected costs, including bills for injured employees, compensation for damaged property, and payments for legal fees.
Are you still confused about PA contractor insurance, or do you need some help getting a quote for your business? Contact us today and get all the information you need fast and for free!
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