There are many ways you can lower your insurance costs as a contractor. Here are seven tips and strategies to save money on contractors’ insurance premiums. Contractors liability policy is an essential business insurance that ensures financial protection from third-party claims against your business or employees, due to any accident or risks on the job site. 

Almost all construction projects require coverage, but contractors don’t have to pay higher premiums to get the insurance policy they require.  Hence, we bring tips to save on construction insurance by lowering your insurance premiums without affecting coverage. 

How To Save On Construction Insurance 

Contractor’s insurance is vital for every construction business, due to the proneness to accidents. However, the cost of purchasing these policies may be too high if you don’t apply the tips below. They include:

Cut Unnecessary Coverage 

An effective way to lower the cost of general liability insurance for contractors is to reduce the coverage options in the policy. Ensure the purchased policy only covers things that are vital to the business. 

Equipment coverage is essential for all construction businesses, same as business property coverage, but it’s not all construction businesses that require workers compensation. One-man-owned construction businesses may not need workers compensation coverage. Thus, it shouldn’t be added to the insurance policy with such a business structure. 

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A contracting company must know the coverage essential for every construction project because It’s not every general liability insurance that’s applicable on a job site. This helps lower the insurance premiums, reducing the insurance quotes for contractor’s insurance. 

Pay Insurance Premiums in Full 

Most insurance companies add interest charges to insurance costs when you fail to make payments at once. This increases the insurance rates for the general liability insurance policy. 

The longer it takes to pay the full insurance costs, the longer you get to pay insurance carriers interest charges. Thus, it’s always advisable to pay the premium for your preferred insurance policy in full. It lowers the cost of the general liability insurance policies and saves money. 

Bundle Your Insurance Policies Together 

Buying every insurance policy separately can increase the insurance costs for most contractor’s insurance. Most insurance carriers offer discounts when you combine more than one policy. 

Hence, rather than buying workers compensation and equipment insurance policy separately, you can choose to bundle them alongside a professional liability insurance which protects you from personal and advertising injury

Purchasing contractor insurance in bundles is an effective way to get reduced insurance quotes from most insurance companies. Top insurance companies allow you to bundle purchased contractors’ insurance. This strategy reduces the cost of general liability insurance products and ensures increased patronage for the insurance provider. 

Increase Your Deductible 

Deductibles and premium work inversely. This implies that lower deductibles leave you with higher insurance premiums while a higher deductible lowers it. Hence, increasing your lower deductible to make it a higher deductible can reduce the cost of buying general liability insurance from an insurance provider.

This is because monthly premiums go down with a higher deductible, leaving more resources available for contractors to complete their construction projects or invest in their construction businesses. 

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Deductibles are ways policyholders show commitment to an insurer. Thus, having a higher deductible can get you special offers from an insurance company compared to other insurance companies. 

Periodically Review Your Policy 

Periodic policy review ensures that you’re not paying for the general liability coverage you don’t need. This prevents you from spending more on purchasing contractor insurance. 

During a business year, it’s necessary to have minor changes like hiring and firing staff, purchasing new equipment, etc. It’s essential to notify your insurance agent or insurer directly about these changes to prevent unnecessary coverage and cost. It’s recommended to review your business insurance policies at least once a year. 

Leverage Referrals 

Asking friends and colleagues for referrals is another way of buying general liability insurance for contractors at a reduced cost. An experienced contractor may have faced 5+ or fewer claims. 

Such a person can recommend insurers with the best quotes and coverage. Whether you need coverage against bodily injury, replacement costs, or auto accident, you can always get a recommendation on the best policy with a low premium through referral.

Getting Insurance Quotes from Independent Agents 

An experienced insurance agent can help businesses own insurance for contractors at a reduced cost by comparing insurance quotes from different insurers and presenting the cost-effective one. 

This may be the most efficient and cost-effective method to purchase your next insurance. Independent agents offer various policies, from homeowners’ insurance to insurance for contractors. 

You can always leverage them for the best deals. Contractors Liability is one of the well-known independent agents you can trust to get the best premium on insurance for contractors. 

Common Factors That Affect General Liability Insurance Costs

Calculating the exact cost for general liability insurance isn’t possible because no two contractors can do an equal amount of the same work type. Hence, insurers use various criteria to determine insurance costs for contractors. They include:

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  • Type of Work Being Performed — Before purchasing your next insurance, consider the type of work and how high the risk affects your premium. 
  • The Amount of Company’s Revenue — Companies that generate high revenue are more likely to have lower premiums due to their ability to have higher deductibles. Most insurers consider this when giving an insurance quote. 
  • The Amount of Coverage Requested — The higher the needed coverage, the higher the insurance cost for contractors. This is why you must cut unnecessary coverage in your next insurance purchase to reduce costs. 
  • Number of Employees — The higher the number of employees under a contractor, the more they have to pay to purchase insurance. Workers compensation coverage increases with a large number of workers. An employer must ensure he updates his employees’ numbers on every next insurance purchase. 
  • The State Where the Company is Located — Business location and state policies also affects how much premium companies have to pay to purchase an insurance policy. This isn’t limited to contractor’s liability insurance. It applies to homeowner’s insurance and other insurance coverage. 
  • Prior Claims History of The Business — The business’s claims history affects the cost of insurance purchase. Businesses with a higher claims history are more likely to have future claims. Hence their premiums are always high. However, those with fewer claims or no claim history enjoy lower premiums. 


Appropriate contractor’s general liability insurance coverage ensures that you don’t need a loan from any financial institution to cover the loss. However, purchasing the right insurance for contractors doesn’t have to be costly. The tips mentioned above should help you get the best policies for your business at a reduced cost