Excavation Contractors Insurance Requirements

Excavation contractors play a crucial role in the construction industry. As important as their job may be, their work is still dangerous. A lot can go wrong while grading, clearing land or demolishing structures. Excavation contractors insurance can help protect against financial risk if an accident happens.

Who Needs Excavation Insurance?

Anyone who works in the excavation industry will need excavation insurance, including:

• Excavation companies
• Concrete companies
• Blasting contractors
• Demolition companies
• Foundation diggers/drillers

If you run any of these businesses or work as an independent contractor in these industries, you should have excavation insurance.

Why Business Insurance for Excavation Contractors Is Necessary

Why do you need business insurance for excavation contractors? With so many other expenses, many business owners wonder if it’s really necessary to purchase yet another insurance policy. And the answer is yes.

Here’s why:

• Let’s say that your excavation contractor is hauling machinery to a construction site in the winter. The roads are icy, which causes the contractor to slide across an intersection and crash into an electric pole. Because you have auto liability insurance, your coverage will pay for the cost of repairs and property damage.
• Let’s say that you’re demolishing a building and a group of bystanders gathers to watch. Although you’ve taped off the area, debris falls from the building and hits one of the bystanders, causing injuries. Your general liability insurance will cover the cost of medical expenses and help settle any lawsuits that may arise from the incident.

These are just two possible scenarios that could easily lead to financial ruin if you don’t have insurance.

Excavation work is risky and dangerous. Insurance will help protect your finances should the worst happen on a job site.

Types of Insurance Excavation Companies Require

A comprehensive excavation insurance policy will include several coverages that protect against the biggest risks you’ll face, including:

General Liability Insurance

General liability is the most important coverage and will likely be legally required. If you’re at fault for an accident that causes injury or property damage, liability will cover the cost of repairs or medical care.

General liability can also cover the cost of:

• Legal fees
• Defense costs
• Medical payments
• Settlements

Liability claims can be very costly, so having this insurance can help protect your business from bankruptcy.

Business Owners Policy

A business owners policy (BOP) is a packaged policy that includes:

• General liability
• Property coverage
• Business interruption insurance

Some insurance companies include other endorsements with their BOPs. Because coverages are bundled together, the cost is typically lower than purchasing each coverage individually.

Business Interruption Insurance

A business interruption insurance policy covers business costs that you must cover if you cannot operate your business due to a loss. For example, if your excavator was damaged in a storm and is being repaired, business interruption insurance will cover lost profits due to the interruption.

Commercial Auto Insurance

Hauling your excavator to and from the job site, hauling gravel or soil and so on requires semi-trucks, dump trucks and work trucks. Commercial auto insurance will provide coverage for your vehicle if you’re in an accident. Insurance may cover the cost of renting a new vehicle, repairs and replacement, and medical costs.

Commercial Property Insurance

A commercial property policy will cover the physical assets that you own, such as:

• Building
• Equipment
• Inventory
• Etc.

If any of these assets are stolen or vandalized, they’ll be covered. Additionally, the assets may be covered if they’re damaged in a natural disaster.

Professional Liability Insurance

If you’re accused of providing inaccurate advice or found to be negligent in some way, professional liability will cover these costs. For example, if you neglect to identify underground utilities and end up hitting them, you can be sued for negligence, which professional liability will cover.

Inland Marine Insurance

Your tools and equipment are expensive. Inland marine insurance protects these items when they’re:

• In transport to excavation sites
• Stored at an excavation site

Workers’ Compensation Insurance

If you’re the sole employee of a business, you can skip this form of insurance. Business owners in most states will need to have workers’ compensation if they have employees. You’ll pay into workers’ comp with the benefit of providing your employees the following if they’re injured or become ill due to being on the job:

• Medical expenses
• Lost wages

Businesses with workers’ comp also limit their risk of being sued for a work-related injury or illness.

Commercial Umbrella Insurance

Umbrella insurance provides additional protection to business owners, allowing them to cover expenses that exceed policy limits. Depending on the policy, many of the exclusions from other insurance types may be covered by an umbrella policy.

Weigh the costs of securing umbrella insurance or raising the limits of other forms of insurance.

How Much Does Excavation Insurance Cost?

Excavation insurance costs depend on multiple factors, including:

• Business size
• Industry
• City/state
• Number of employees
• Claims history

A general range that you’ll receive for an excavation business insurance quote is between $60 and $130 per month. Higher aggregates cost more, but these ranges are between $1 million and $2 million per occurrence.

To determine how much your insurance will cost, start with getting an excavation business insurance quote and comparing your options from different providers.