Excavation Contractor Insurance Policy Information
Excavation Contractor Insurance. An excavation contractor is one who is responsible for preparing land for construction. Excavating contractors specialize in digging into the ground for building foundations or trenches for utility lines. The digs may be deep or shallow. Some provide related services such as grading of land, land clearing, or hauling and disposal of earth and debris.
As a result, excavating work comes with many risks. With the level of risk involved in this kind of work, it's important you have the right and enough coverage to protect your company.
Keeping your business protected is one of the most important things you can do especially in the field of excavation. If you are an independent excavation contractor, you must ensure that your business has the right insurance to keep you and employees protected. That's is why a smart move is to ensure they are properly protected with an-adequate excavation contractor insurance policy.
Excavation contractor insurance protects your business from lawsuits with rates as low as $67/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked excavation contractors insurance questions:
- What Is Excavation Contractor Insurance?
- How Much Does Excavation Contractor Insurance Cost?
- Why Do Excavators Need Insurance?
- What Type Of Insurance Do Excavators Need?
- What Does Excavation Contractor Insurance Cover & Pay For?
What Is Excavation Contractor Insurance?
Excavation contractor insurance is a type of insurance that provides financial protection for excavation contractors and their business operations. It typically covers a range of risks associated with excavation work, including property damage, liability for personal injury or damage to third-party property, and financial losses due to unforeseen events such as weather damage, equipment breakdowns, or theft.
Excavation contractor insurance policies can also provide coverage for tools and equipment, as well as business interruption insurance that protects against financial losses caused by downtime due to covered events.
How Much Does Excavation Contractor Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small excavation contractors ranges from $67 to $99 per month based on location, size, payroll, sales and experience.
Why Do Excavators Need Insurance?
here are some reasons why excavators need insurance:
Liability protection: Excavators are involved in heavy-duty construction projects that can result in significant damage to property or injury to individuals if not handled correctly. Insurance provides liability protection in case of accidents that occur on the job.
Equipment protection: Excavators are expensive machines, and their repair or replacement can be costly. Insurance provides protection for the excavator in case of theft, fire, or other damage.
Worker compensation: Excavators are operated by skilled workers, and accidents can happen on the job. Insurance provides worker compensation to cover medical expenses and lost wages if a worker is injured while operating the excavator.
Legal defense: In the event of a lawsuit, insurance provides legal defense to protect the excavator from financial damages.
Overall, insurance is important for excavators as it protects the equipment, workers, and the company from financial losses in case of accidents or unexpected events.
What Type Of Insurance Do Excavators Need?
Some excavation jobs can be risky, and many accidents can and do happen on excavation sites. Most times these accidents can be costly which is why you must ensure that your business has the proper excavation contractor insurance policies:
- Commercial general liability insurance: With this kind of liability insurance you are covered for property damage or third-party injuries caused by your employees. Making sure you have the right amount of insurance coverage before beginning a job is important. If you are hired to do excavation work you may be required to add the general contractor as an additional insured on your CGL for the duration of the project.
- Umbrella insurance coverage: Property damage or serious injuries while on the job can be expensive. As a result, the regular insurance policy may not have the limit to keep you fully protected. This type of coverage gives you more protection over your business finances by allowing you to buy extra liability insurance coverage.
- Commercial auto liability coverage: Excavation work may require you to move equipment to and from the job site. Heavy equipment such as 18-wheelers, backhoes and dump trucks are just some the type of equipment you may be transporting. A commercial auto insurance policy gives you a higher limit than the regular auto insurance policy. It's a good idea to have this type of coverage so that you can stay protected to protect against the damage of you excavating equipment.
Workers Compensation For Excavation Contracting
In most states workers compensation is a must for any non-owner employees. Most hiring general contractors require that you have workers compensation insurance. Showing proof that you have this type of insurance may be necessary to get the job.
Excavation Contracting Property Coverage
It's a good idea to keep the equipment you will be using for your excavation jobs protected. Protecting them from damage and theft is important. Most of the time when a top contractor is working on a project they will have purchased builders risk insurance policy.
With this type of policy, all property on the job site and other assets owned by your business are protected.
Inland marine insurance is also good to keep your tools, business property and machinery protected. A wide range of coverage types is offered with this these types of insurance. Speaking with an independent insurance agent will allow you to decided on the insurance type that is right for you.
Being protected while on the job is one of the most important things when doing excavation work. To ensure your workers are safe and that the tools and machinery being used are safe ones must make sure that they have the right insurance. Getting the right insurance can be hard because you want to get the right coverage for your business.
Excavating Contractor's Risks & Exposures
Premises liability exposures at the contractor's office are generally limited due to lack of public access.
At the job site, digging and other operations pose numerous hazards, especially if the contractor exercises inadequate control of the area. The public or employees of other contractors can be injured due to trips and falls over debris, equipment, or uneven ground. Once a hole is excavated, there must be shoring or other supports to prevent collapse if people are to work in the hole.
Digging can result in cutting utility cable, damaging utility property and disrupting services to neighboring residences or businesses. A significant morale hazard may be indicated by the absence of detailed procedures to determine utility locations and to research prior uses of the land. Construction sites create an attractive nuisance hazard, especially if work is close to residential areas.
All equipment must be disabled when not in operation to prevent untrained individuals from using it. Fencing must be in place with appropriate warning signs to prevent trespassing. Excavating in an area of existing structures requires extra vigilance to prevent foundation and structural damage to nearby buildings.
Environmental impairment exposure is moderate due to the potential for air, land, and water pollution from the use and storage of fuels along with the possibility of erosion from construction operations. Spills must be controlled and equipment monitored at all times. Operations can result in claims of noise or dust pollution by neighboring properties and claims for cumulative structural damage to neighboring foundations from heavy traffic.
Workers compensation exposures can be high. Lifting and back injuries, hernias, sprains and strains can occur from setting up equipment for excavation. Collapse of retaining walls, mudslides or landslides, sinkholes, or overturn of equipment may result in severe injury or death from crushing or suffocation. Digging and grading of land may result in injury from underground electrical cable or gas lines.
Common hazards include slips and falls, foreign objects in the eye, hearing impairment from noise, cuts or puncture wounds, bites from insects or vermin, and exposure to pollutants. As operations are often conducted in remote areas, it may be difficult to transport an injured worker to a medical facility to receive prompt treatment.
The absence of good maintenance, proper use of basic safety equipment, such as properly installed guards, steel-toed shoes, and eye protection, and strict enforcement of safety practices may indicate a morale hazard.
Property exposures at the excavator's own location are generally limited to those of an office and storage of equipment and vehicles. Fire hazards arise from refueling and repair operations due to the storage and use of flammable gasoline and other fuel sources.
Crime exposure is from employee dishonesty. Background checks should be conducted prior to hiring any employee. All ordering, billing and disbursements must be handled as separate job duties and regularly audited. Physical inventories should be conducted on a regular basis to prevent employee theft of equipment.
Inland marine exposures include accounts receivable if the contractor bills customers for services, computers, contractors' equipment, and valuable papers and records for customers' and regulatory information. Excavation equipment can be heavy and difficult to transport without adequate loading, tie-down and unloading procedures. If the equipment's load capacity is exceeded during excavation, the equipment may be damaged. Excavation may be conducted on uneven surfaces in rural area.
Equipment may strike underground objects or utilities, fall into holes or pits, slip or fall into mud, water or sinkholes, be damaged in rock, land or mud slides, or burst into fire from overload. Equipment may be subject to changes in the weather, water hazards, drop and fall from heights, or being struck by other vehicles. Equipment left at jobsites may be subject to theft and vandalism. Equipment should be secured and rendered inoperable when not in use.
Commercial auto exposures are high due to the transport of oversize machinery and equipment and loads of excavated dirt and gravel. Roads in rural areas may be narrow and the ground uneven, increasing the risk of collision and upset. The driver of the truck must be trained in handling a top-heavy vehicle as considerable skill and knowledge is required for safe driving. If there is a collision, the resulting overturn may spill the load spill onto a public road and preventing access until clean up is completed. All drivers must have appropriate licenses and acceptable MVRs. Vehicles must be maintained and the records kept in a central location.
What Does Excavation Contractor Insurance Cover & Pay For?
Excavation contractors may be sued for various reasons, including:
- Property damage: If an excavation contractor damages a neighboring property or a utility line, they may be sued for the cost of repairs.
- Personal injury: If someone is injured on the excavation site, they may file a lawsuit against the contractor for medical expenses, lost wages, and pain and suffering.
- Delayed completion: If the excavation project takes longer than the agreed-upon time, the client may sue the contractor for breach of contract and lost revenue.
- Environmental damage: If the excavation causes environmental damage, such as soil erosion or contamination, the contractor may be sued for the cost of cleanup.
- Negligence: If the contractor fails to follow safety regulations, resulting in an accident or injury, they may be sued for negligence.
Insurance can protect excavation contractors from the financial burden of these lawsuits. Some types of insurance that may be helpful for excavation contractors include:
General Liability Insurance: This type of insurance provides coverage for property damage and personal injury claims. For example, if an excavation contractor damages a neighbor's property, the general liability insurance can cover the cost of repairs.
Professional Liability Insurance: This insurance covers claims related to errors or omissions made by the contractor. For example, if the excavation contractor fails to properly assess the soil conditions, resulting in a delay, the professional liability insurance can cover the cost of the lawsuit.
Workers' Compensation Insurance: This insurance provides coverage for workplace injuries and illnesses. If an employee is injured on the excavation site, the workers' compensation insurance can cover the cost of medical expenses and lost wages.
Pollution Liability Insurance: This insurance provides coverage for claims related to environmental damage caused by the excavation. For example, if the excavation contractor causes soil contamination, the pollution liability insurance can cover the cost of cleanup.
Overall, insurance can help excavation contractors pay for the costs associated with lawsuits and protect them from financial losses. However, it is important for contractors to carefully review their insurance policies and ensure they have adequate coverage for their specific needs.
Commercial Insurance And Business Industry Classification
- SIC CODE: 1794 Excavation Work
- NAICS CODE: 238910 Site Preparation Contractors
- Suggested Workers Compensation Code(s): 6217 Excavation & Drivers
1794: Excavation Work
Division C: Construction | Major Group 17: Construction Special Trade Contractors | Industry Group 179: Miscellaneous Special Trade Contractors
1794 Excavation Work: Special trade contractors primarily engaged in excavation work and digging foundations, including digging and loading. Contractors in this industry may also perform incidental concrete work. Contractors primarily engaged in concrete work are classified in Industry 1771; and those primarily engaged in trenching or in earth moving and land clearing not related to building construction are classified in Major Group 16.
- Excavation work-contractors
- Foundation digging (excavation)-contractors
- Grading: except for highways, streets, and airport runways-contractors
Excavaction Contractor Insurance - The Bottom Line
To find out exactly what type of excavation contractor insurance you need and how much coverage you should have, speak to a commercial insurance broker to go over all your options.
Additional Resources For Construction Contractors Insurance
Learn about construction contractors insurance, including how much the premium costs and what is covered - and how business insurance can help protect your construction business from lawsuits.
- Blasting & Drilling Contractors
- Bridge Contractors
- Building Contractors
- Cable Layers
- Demolition Contractors
- Dock & Pier Contractors
- Dredging Contractors
- Foundation Layers
- General Contractors
- Road Contractors
- Sewer Contractors
- Steel Erection Contractors
- Surety Bonds
The construction industry is a high-risk industry that requires business insurance to protect against potential losses. There are several reasons why the construction industry needs business insurance:
Liability risks: Construction projects often involve working on other people's property, which can lead to potential liability risks if any damages or accidents occur. Liability insurance helps to protect against these risks by providing coverage for any legal fees or damages that may arise.
Property damage: Construction projects can also be at risk for property damage, whether it's the company's own equipment or tools, or the property being worked on. Commercial property insurance including inland marine helps to cover the cost of repairs or replacement of any damaged property.
Worker injuries: Construction is a physically demanding industry, and accidents and injuries are a common occurrence. Wrokers comp helps to cover the cost of medical treatment and lost wages for injured workers.
Financial losses: Construction projects can be disrupted by a variety of factors, such as weather, delays, or changes in scope. Business insurance helps to protect against financial losses that may occur as a result of these disruptions.
Overall, insurance is an essential component of the construction industry as it helps to protect against a range of potential risks and losses. Without it, companies in the construction industry would be vulnerable to financial ruin and may not be able to continue operating.
Minimum recommended small business insurance coverage: Business Personal Property, Employee Dishonesty, Surety Bonds, Accounts Receivable, Builders' Risk, Computers, Valuable Papers and Records, General Liability, Employee Benefits Liability, Umbrella Liability, Business Automobile Liability and Physical Damage, Hired and Nonowned Auto Liability & Workers Compensation.
Other commercial insurance policies to consider: Building, Business Income with Extra Expense, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Contractors' Equipment, Goods in Transit, Installation Floater, Cyber Liability, Employment-related Practices Liability, Environmental Impairment Liability, Stop Gap Liability, Unmanned Aerial Vehicles (UAV) (Drones).