How much does paving contractor insurance cost?
Key paving contractor insurance policies and their expected costs
Here are the top paving business insurance policies and their average monthly costs:
- General liability insurance: $77 per month
- Business owner's policy (BOP): $105 per month
- Workers' compensation insurance: $226 per month
- Commercial auto insurance: $186 per month
- Contractor's tools and equipment insurance: $14 per month
- Professional liability insurance: $65 per month
- Commercial umbrella insurance: $86 per month
- Surety bonds: $8 per month
Our figures are based on the median cost of policies for paving contractors who request quotes through TechInsurance. The median provides a better estimate of your expected insurance rates because it excludes outlier high and low premiums.
General liability insurance for paving contractors
Paving installation businesses spend an average of $77 per month, or $926 per year, for general liability insurance.
Though general liability is usually not required by law for pavers, this policy may be required in order to sign a lease, obtain a license in your state, or work with certain clients.
General liability coverage protects your small business from common third-party risks, such as customer property damage or bodily injury. It also covers copyright infringement, defamation, and other advertising injuries.
For example, if a passerby trips over the cord of your paving equipment and breaks their ankle. This policy would cover their medical bills and any legal defense costs if the injured third party decides to sue.
Most policies include product liability insurance, also called products-completed operations insurance, which covers harm caused by a defective product or a completed service.
Below is the average general liability policy for paving contractors who buy from TechInsurance:
Premium: $77 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $500
General liability insurance costs are based on several factors, including the type of paving services you offer, policy limits, size and location of your business, and any subcontractors or additional insured endorsements you may have.
Business owner’s policy for paving contractors
On average, construction businesses (including paving businesses) pay $105 per month, or $1,256 per year, for a business owner's policy (BOP).
A BOP combines your general liability and commercial property insurance coverage. This bundle typically offers a discount compared to purchasing each policy separately.
It protects your small business against both property and liability risks, such as theft of business property, a fire at your office, or an accident that injures a client.
This is the average business owner's policy for construction businesses that buy from TechInsurance:
Premium: $105 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Paving companies that qualify for a BOP are usually small and low-risk. Learn more about business owner's policy eligibility.
Many insurance companies allow policyholders to add business interruption insurance, also called business income insurance, to their business owner's policies. You can also add it as an endorsement. This policy pays for lost profits and day-to-day operating expenses if a fire, storm, or other incident forces your business to close temporarily.
The cost of a business owner's policy depends on the value of your business property, your business size, location, policy limits, and revenue.
Workers’ compensation insurance for paving contractors
Construction businesses, including pavers, spend an average of $226 per month, or $2,715 annually, for workers' compensation insurance.
To comply with state laws and avoid penalties, businesses with one or more employees typically must buy this type of coverage.
Workers' comp coverage pays for medical costs and disability benefits when you or an employee suffers a work-related injury or illness. For example, if a paver burns themselves while mixing cement, a workers' comp policy would pay for their emergency room visit, medications, and physical therapy.
Workers' compensation coverage usually includes employer's liability insurance, which pays for legal costs related to workplace injuries.
State laws often require pavers to secure workers' comp as soon as they hire their first employee, but that's not always the case. It's required in California and New York for every business with employees, in Florida for every business with four or more employees, and it's optional for most companies in Texas.
Some states require sole proprietors and independent contractors in the construction industry to obtain workers' comp even if they work alone. It's highly recommended in either case, since most health insurance plans can deny claims for on-the-job injuries.
The cost of workers' comp is based on several factors, primarily the number of employees you have and their occupational risks. It's often less expensive for businesses in states that have lower healthcare costs.
Find workers' comp requirements in your state
Commercial auto insurance for paving contractors
Construction professionals, including pavers, spend an average of $186 per month, or $2,226 per year, for commercial auto insurance. Almost every state requires this type of insurance for businesses that own a vehicle.
If your paving business vehicle is involved in an accident, a commercial auto policy can help cover damages, including medical expenses, property repairs, and legal fees. You can also buy comprehensive coverage to gain protection against theft, vandalism, and storm damage.
To protect personal, rented, and leased vehicles used for business purposes, you'd need hired and non-owned auto insurance (HNOA) instead.
The cost of commercial auto insurance depends on many factors, including your employees' driving records, your policy limits, the number of vehicles you own, and the coverage options you choose.
Contractor’s tools and equipment insurance for paving contractors
Construction businesses, including paving businesses, pay an average of $14 per month, or $169 yearly, for contractor’s tools and equipment insurance.
Tools and equipment coverage is a type of inland marine insurance that covers business property that's in transit, stored off-site, or used at jobsites.
This policy covers tools and equipment that are stolen, damaged, or destroyed, such as mixers, cement, and other common paving supplies.
However, it doesn't pay for normal wear and tear. It's designed to protect gear on the go, for items valued at $2,500 or less.
The cost of tools and equipment coverage depends mostly on the value of your tools and equipment. Another important factor is whether you choose to insure them for their actual cash value (the value of the used item) or their replacement cost (the cost of a brand-new replacement).
Professional liability insurance for paving contractors
On average, construction businesses and paving contractors pay $65 per month, or $785 per year, for professional liability insurance.
Also called errors and omissions insurance (E&O), professional liability insurance covers financial losses related to mistakes, missed deadlines, and other instances of professional negligence. This includes attorney's fees and other legal expenses if a client decides to sue over unsatisfactory work.
For example, if a paver uses the wrong type of concrete for a parking lot job, causing significant delays and repair costs, this policy would cover legal defense costs if the property owner sues.
This is the average professional liability policy for contractors who purchase from TechInsurance:
Premium: $65 per month
Policy limits: $1 million per occurrence; $1 million aggregate
Deductible: $1,250
If you choose to purchase a combined policy of general liability and professional liability, you'll pay an average of $111 per month, or $1,330 per year.
The cost of professional liability insurance is determined by several factors, including the coverage limits and deductible you choose, the size of your business, the type of paving work you do, and your claims history.
Commercial umbrella insurance for paving contractors
Construction businesses, including paving businesses and contractors, pay an average of $86 per month, or $1,035 yearly, for commercial umbrella insurance.
This policy helps increase the coverage of your underlying liability insurance, such as general liability, commercial auto, or employer's liability insurance.
When the underlying policy reaches its limit on an insurance claim, your umbrella policy activates to provide any additional coverage needed.
Umbrella coverage is typically available in $1 million increments. You need to have another liability policy before you can buy this coverage.
The cost of commercial umbrella insurance for your paving business depends mostly on the amount of coverage you buy. The same factors that affect the cost of the underlying policies can also influence your premium.
Surety bonds for paving contractors
The average cost of a surety bond for construction businesses, including paving installers, is $8 per month, or $100 annually.
Surety bonds protect your paving clients by providing reimbursement in the event that your business is unable to fulfill the terms of a contract or agreement. For this reason, you may be required to obtain a surety bond in order to sign a client contract.
Some states require paving contractors to have a surety bond as part of their legal requirements for a contractor's license. The bond guarantees that your work will comply with building codes and other regulations.
As with a fidelity bond, the cost of a surety bond is a small percentage of the total bond amount. Unlike insurance, you'll need to repay the company that issued the bond in the event of a claim.
Top factors impacting paving contractor insurance costs
Several key factors impact paving insurance costs, including:
- Types of paving services offered: Paving businesses that offer high-risk services, such as commercial projects and highway paving with heavy-duty asphalt, tend to have higher average costs than less risky types of work, like small residential projects.
- Number of employees and additional insureds: A larger workforce increases the risk of accidents, injuries, and lawsuits arising from employee and customer interactions.
- Value of business equipment: Your commercial paving property can impact your insurance, with more expensive property requiring higher coverage limits. For example, expensive heavy machinery will cost more to insure than more budget-friendly options.
- Types of insurance products purchased: Some policies, such as general liability insurance, are less expensive than others.
- Coverage limits and deductibles: How much insurance you elect to purchase will impact your insurance costs. Higher deductibles and lower limits on your policies can help you save money.
- Claims history: Previous insurance claims may signal policyholder risk to insurers, as businesses with a history of claims are more likely to file future claims.
- Business location: Businesses in areas with higher crime rates, more foot traffic, or greater exposure to severe weather often pay higher insurance rates.
- Business size and annual income: Larger businesses with higher annual revenue and more employees will generally pay more for insurance solutions than smaller businesses.
- Years of experience: The longer you and your paving business have been in operation, the less of a risk you are to insure, and the lower your insurance premiums will tend to be, according to many insurance companies.
There are some factors you can’t control when it comes to paving business liability insurance costs, but you and your employees can still take meaningful steps to engage in risk management and reduce claims, which can help keep your insurance costs down.
How do I get affordable paving and asphalt contractor insurance with TechInsurance?
TechInsurance makes it easy for paving contractors, general contractors, and other construction professionals to find the right insurance for their business in three easy steps:
- Fill out a free online application with details about your business.
- Compare paving contractor insurance quotes from top-rated U.S. providers in real-time.
- Choose the best policies for your business and pay the premiums to begin coverage.
TechInsurance's licensed insurance agents are available to help answer questions about your risks, state insurance requirements, and how to find cheap paving contractor insurance that matches your insurance needs.
Having the right coverage will give you peace of mind and financial protection against the unique risks of your profession.
Once you've bought the insurance policies you need, you can download a certificate of insurance. Small business owners can usually get proof of insurance within 24 hours of applying for quotes.
