Road Contractors Insurance Policy Information
Road Contractors Insurance. The services that street, highway, and road contractors provide are in high demand. Roadways across the country need to be repaired, improved, and expanded, and new roadways need to be installed.
Street and road contractors build, maintain, or repair streets, highways, and interstates. After the route is designed and the land cleared, road construction consists of grading and leveling the earth, laying a bed of gravel, laying down the subsurface road bed (usually of cast-in-place reinforced concrete), surfacing the road with pavement, drying and curing, and marking lanes and crosswalks.
For some projects, mesh or reinforcement bars (rebar) will be used to strengthen the finished pavement. Road contractors may perform all of these operations or just the subsurface work. Bridges, underpasses and viaducts, and projects over or near water involve additional steps.
Surface work includes laying down the uppermost surface of asphalt or concrete which must withstand wear-and-tear from tire friction and the elements. The surface may be made of asphalt or concrete. A cold or hot mixture may be used. Cold mixtures are often used for temporary repairs and patching as they can be used at lower temperatures, but they are not as strong or durable as a hot mix, which is a combination of asphalt and concrete.
Operations may include transporting unwanted dirt and debris to dump sites or bringing sand, gravel, and other materials to the job site. Hot mix plants ("batch plants") that are transported to jobsites generally produce paving materials, but smaller operations will purchase the hot mix, and have it delivered to their jobsite. After the mixture is laid, a paving machine levels the surface so it will be smooth.
Whether you're repaving battered roadways, expanding highways, or installing new interstates, as a road contractor, the work you do is tedious and can be quite taxing.
Road contractors face numerous risks. While you try your best to avoid those risks, in the event that something does go wrong, you are financially liable for the repairs, damages, and injuries that may occur. As you can imagine, such costs can be extremely exorbitant, but if you're properly insured, you can avoid serious and potentially devastating financial loses.
What kind of risks do road contractors face? What type of road contractors insurance are needed? Read on to find out how to properly protect yourself, your business, and your assets.
Road contractors insurance protects businesses from lawsuits with rates as low as $47/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked road contracting insurance questions:
- What Is Road Contractors Insurance?
- How Much Does Road Contractors Insurance Cost?
- Why Do Road Contractors Need Insurance?
- What Type Of Insurance Do Road Contractors Need?
- What Does Road Contractors Insurance Cover & Pay For?
What Is Road Contractors Insurance?
Road Contractors Insurance is a type of insurance policy designed specifically for road construction companies and their employees. It protects against a variety of risks associated with road construction projects, including property damage, liability claims, and workers' compensation claims.
This insurance coverage may include general liability insurance, automobile liability insurance, workers' compensation insurance, and excess liability insurance. The coverage and limits of a road contractors insurance policy will depend on the specific needs and risks of the construction company.
How Much Does Road Contractors Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small road contractors ranges from $47 to $89 per month based on location, services offered, payroll, sales and experience.
Why Do Road Contractors Need Insurance?
"Road contractor" is an all-encompassing title that is used to describe contractors that perform a variety of tasks; road and sidewalk paving, freeway construction, highway resurfacing, and more. No matter the specific nature of your job, if the work you do falls under the title of "road contractor", you face a number of risks.
Examples of these risks include work-related accidents and injuries, vehicle collisions, and property damages. While you always go the extra mile to ensure that you deliver impeccable work, there's always a chance that something could go wrong. In the event that something does go wrong, you will be held financially liable. That's why carrying insurance is so important.
With the right type of insurance coverage, if something unexpected does occur, road contractors can avoid the financial repercussions that are associated with mishaps.
For example, if you a third-party filed a lawsuit against you, claiming that you damaged their property while repaving a roadway, or if you sustained a work-related injury, instead of having to pay for the related expenses out of your own pocket, your insurance carrier will cover the costs for you.
In other words, by having the right type of road contractors insurance coverage, you can avoid serious and potentially devastating financial losses.
What Type Of Insurance Do Road Contractors Need?
There are several types of coverage options available for road contractors. The specific types of policies that road contractors should carry depend on a variety of factors, such as the specific services they provide and the region they are located in.
For these reasons, in order to find out exactly what type of coverage you should invest in, speaking to a licensed and experience commercial insurance agent is highly recommended. With that said, however, here's a look at some of the most essential road contractors insurance policies needed:
- Commercial General Liability: This type of insurance policy will help to cover the costs that are associated with third-party liability and property damage claims. For instance, if a third party were to file a lawsuit against you, claiming that you damaged their property, commercial general liability insurance would pay for the related costs, such as legal defense fees, settlement fees, and repairs to damages that you may have been found liable for.
- Inland Marine: This type of coverage offers protection for a road contractor's property that is mobile in nature, such as equipment that they own and transport from one location to another. In the event that this property is lost, stolen, or damaged, inland marine insurance will help to cover the related expenses.
- Commercial Property: To protect the physical property of the space that you operate your business out of, such as an office, a warehouse, or a garage, and the equipment and materials that are housed within it, from damages and losses that are associated with acts of nature, theft, or vandalism, you'll need to invest in commercial property insurance.
- Workers' Compensation: If you have employees, you're responsible for their well-being. Workers' compensation will help to cover the costs that are associated with any work-related injuries or illnesses that employees may face.
The above are just a few examples of the different types of road contractors insurance policies that should be considered. To find out how much coverage you'll need and to develop policies that offer robust protection, speak with an experienced insurance agent.
Road Contractors' Risks & Exposures
Premises liability exposure at the contractor's premises is limited due to lack of public access. Equipment and materials stored in the open may present an attractive nuisance to children. If a hot tar process is used at the contractor's premises, it poses a fire hazard as high winds may carry smoke and heat to adjacent properties.
Contact with the tar or bitumen is a minor injury and property damage hazard. Off-site exposures are extensive. The area of operation should be restricted by barriers and proper signage to protect the public from the hazards of digging and overhead operations. Digging and excavation, the operation of heavy machinery and asphalt plants, and the weight of large mixers and mix-in-transit vehicles present numerous hazards to the public and to employees of other contractors.
Hazards increase significantly in the absence of job site control, including spotters, signage, and barriers where appropriate. Road contractors must contend with vehicular, bicycle, and foot traffic. The smoke, dust, and noise generated by paving operations are often nuisance hazards. The uneven ground, hot tar, and heavy machinery may result in serious injuries to passersby and motorists, as well as property damage to adjacent vehicles, buildings, and residences.
Grading and trenching may result in damage to underground lines or piping, some of which may be catastrophic. Serious traffic accidents may occur in the absence of an appropriate barricading system and clear marking of streets and roads that are closed. The party responsible for warning signs, barricades, and other precautions for drivers must be spelled out in any contract.
At job sites, the contractor is responsible for the safety aspects of the entire project even after hours when there is no construction activity. Construction sites create an attractive nuisance hazard, especially if work is close to residential areas. Wet pavement, in particular, attracts children and vandals. All equipment must be disabled when not in operation to prevent untrained individuals from using it.
Safety barriers such as perimeter fencing may be needed, especially if work is left uncompleted overnight. If the insured does road work on bridges, there may be hazards to persons and property due to falling objects. Work near water poses unique hazards.
The use of subcontractors as well as any contractual liability exposures should be examined.
Personal injury exposures include assault and battery and invasion of privacy. Background checks should be conducted for any employee who will have regular contact with customers.
Completed operations hazards can be high due to the number of vehicles that drive on public roads and the potential for serious bodily injury should the road fail. Quality control and full compliance with all construction, material, and design specifications is necessary. Hazards increase in the absence of proper record keeping of customer specifications, work orders, change orders, as well as inspection and written acceptance of finished work by the customer.
Environmental impairment liability exposures are moderate from the waste generated in the fueling and cleaning of heavy equipment, including mix-in-transit containers, and especially from the asphalt plant. Spillage and leaking of pollutants into the air, ground, or water can result in high cleanup costs and fines. Spills must be controlled, and equipment monitored at all times.
Allowing waste to accumulate either at the job site or in the contractor's yard could result in contamination of air, ground, or water supply. Disposal procedures must adhere to all EPA and other regulatory standards. Proper written procedures and documentation of both the transportation and disposal process are important.
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.
Professional liability exposures are high from the design of the project and the interpretation of specifications by the contractor's engineers. Collapses under the load of traffic are rare but catastrophic. Other factors must be considered, including soil conditions for foundations, historic flood and tide levels, wind shear, and potential for seismic activity.
Due to prior bridge collapses, it is now mandatory that every bridge design be submitted to wind tunnel testing. Many contractors have engineers that will do incidental draft work, such as water drainage channels.
Workers compensation exposures can be very high. Serious injuries or even fatalities may occur from vehicles during work on existing roads, particularly in the absence of an appropriate barricading system and clear marking of streets and roads that are closed.
Working around the asphalt plants or with the hot mix can result in burns and inhalation of smoke or harsh chemicals. Other common hazards include slips and falls, back injuries, hernias, sprains, and strains from lifting or working from awkward positions, cuts and puncture wounds from working with hand tools, foreign objects in the eye, and hearing impairment from cumulative exposure to high-decibel operations, bites from insects or vermin, temperature extremes, auto accidents to and from job sites, 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. Fine sand from the concrete mixture may cause eye injuries or even lung disease such as silicosis. Pouring concrete from a mixer usually involves operations on top of the vehicle; the absence of proper guarding may significantly increase the exposure to loss.
Cleaning residue from inside cement mixers is particularly hazardous without adequate ventilation. 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.
Digging and grading of land may result in injury from underground electrical cable or gas lines. Work on viaducts, bridges, and ramps may involve some work at heights. Work over or near water and waterways poses an additional risk of drowning.
Property exposures at the contractor's own location are usually limited to an office and storage of material, equipment, and vehicles. Ignition sources include electrical wiring, heating, and air conditioning systems. The contractor's yard may include piles of gravel, sand as well as large mixing or batch plants that combine the ingredients for mixing cement or concrete and load them into trucks awaiting transport to job sites.
The exposure is greatly increased if there are large drum mix plants or batch plants involving heat and flammable bitumen or tar. If repair work or cleaning of vehicles and equipment is done in the building, fire hazards may be high due to the storage and use of flammable gasoline and other fuel sources.
If equipment and supplies are stored in the yard, they may be damaged due to wind, vandalism, and theft. Appropriate security measures must be in place including lighting and physical barriers to prevent unauthorized access.
Inland marine exposures are from accounts receivable if the contractor bills customers for services, contractors' equipment, including hot mix plants, goods in transit, installation floater, and valuable papers and records for project plans, clients' and suppliers' information. Copies of project plans and other data should be kept at an offsite location for easier restoration.
Construction equipment and concrete mixed in transit are heavy and difficult to transport. The training of drivers and haulers, especially with respect to the loading, tie-down and unloading, is important to avoid damage from overturn or collision. At the job site, hazards come from uneven terrain, from the abrasive or caustic nature of some of the materials, or from the sheer weight of the surfacing material as it may exceed the equipment's load capacity.
Tools and equipment may strike underground objects or utility lines, fall into holes or pits, slip or fall into mud, water, or sinkholes, be damaged by rock, land, or mud slides, or burst into fire due to overload. Tools and equipment may be damaged by dropping and falling from heights, changes in the weather, water hazards, or being struck by other vehicles.
Hot mix plants may overheat and catch on fire. Materials and equipment left at job sites may be stolen or vandalized. Equipment should be secured and rendered inoperable when not in use. Jobs may involve placement of large precast concrete deck segments manufactured offsite, transported to the job, and lifted up onto bridge piers or other structures with a crane.
Resulting hazards include instability due to overload and wind velocity, causing possible damage to both the crane and the building materials. Contractors may lease, rent or borrow equipment, or may lease out, rent or loan their owned equipment to others, which poses additional risk as the operator may be unfamiliar with operation of the borrowed item.
Crime exposure is from employee dishonesty. Background checks should be conducted prior to hiring any employee. There must be a separation of duties between persons handling deposits and disbursements and reconciling bank statements. Physical inventories should be conducted on a regular basis to prevent employee theft of equipment.
Commercial auto exposures are very high. Serious property damage or injury to passing pedestrians or motorists or to employees of other contractors can arise during loading and unloading of equipment and materials. Similar hazards are posed if trucks are used for grading of land or dump trucks are used for hauling sand and gravel.
The bodily injury and property damage can be severe should hot tar be transported, or the contractor uses mix-in-transit units, which are among the heaviest on the road. These can cause severe bodily injury or property damage even in apparently minor collisions. These units are awkward to handle while driving or in operation and are difficult to tow if they overturn or become stuck in mud.
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 onto a public road and prevent access until cleanup is completed. Equipment unloading and setup may take place on uneven ground, or in undeveloped areas, posing an additional upset or overturn hazard.
Long drives with oversized equipment may lead to driver fatigue and resulting accidents. For long-term projects away from home base, personal use of company vehicles poses a concern. There should be written procedures for personal and permissive use of vehicles furnished to employees.
Similarly, employees may use their own vehicles on company business for long periods, especially to transport crews to the jobsite. All drivers must have appropriate licenses and acceptable MVRs. Random drug and alcohol testing should be conducted. Vehicles must be maintained, and the records kept in a central location.
What Does Road Contractors Insurance Cover & Pay For?
Road contractors may be sued for various reasons, including:
- Construction Defects: If a road or highway is built poorly, defects may arise that can lead to accidents or injuries. Road contractors can be sued for damages caused by construction defects such as potholes, inadequate drainage, or faulty design.
- Negligence: If a contractor fails to follow safety regulations or industry standards, they can be held liable for any resulting accidents or injuries. Negligence can include failing to provide adequate signage or barriers, using improper materials, or failing to properly maintain the roadway.
- Breach of Contract: If a contractor fails to meet the terms of their contract, they can be sued for breach of contract. This can include failing to complete the work on time or within budget, or failing to meet the agreed-upon quality standards.
- Property Damage: Road construction can cause damage to nearby property, such as buildings or vehicles. Contractors can be held liable for this damage and may be sued for compensation.
Insurance can protect road contractors by providing coverage for these types of claims. For example:
General Liability Insurance: This type of insurance can help protect contractors from claims of bodily injury or property damage caused by their work. If a contractor is sued for a construction defect or negligence, general liability insurance can help pay for legal fees, court costs, and any damages awarded.
Professional Liability Insurance: This insurance provides coverage for claims of professional negligence or errors and omissions. If a contractor is sued for failing to meet the terms of their contract or for providing inadequate design or construction services, professional liability insurance can help pay for legal fees and damages.
Auto Liability Insurance: Road contractors may be sued for accidents caused by their vehicles, such as dump trucks or bulldozers. Auto liability insurance can help cover the cost of damages and injuries caused by these accidents.
Overall, insurance can provide a safety net for road contractors and help protect them from the financial impact of lawsuits. It is important for contractors to carefully review their insurance policies and make sure they have adequate coverage for their specific needs.
Commercial Insurance And Business Industry Classification
- SIC CODE: 1611 Highway and Street Construction, Except Elevated Highways, 1622 Bridge, Tunnel And Elevated Highway Construction
- NAICS CODE: 237310 Highway, Street, and Bridge Construction
- Suggested Workers Compensation Code(s): 5506 Street or Road Construction - Paving or Repaving & Drivers, 5507 Street or Road Construction - Subsurface Work & Drivers, 5508 Street or Road Construction - Rock Excavation & Drivers
Description for 1611: Highway and Street Construction, Except Elevated Highways
Division C: Construction | Major Group 16: Heavy Construction Other Than Building Construction Contractors | Industry Group 161: Highway And Street Construction
1611 Highway and Street Construction, Except Elevated Highways: General and special trade contractors primarily engaged in the construction of roads, streets, alleys, public sidewalks, guardrails, parkways, and airports. Special trade contractors primarily engaged in the construction of private driveways and sidewalks are classified in Industry 1771.
- Airport runway construction
- Alley construction
- Asphalt paving: roads, public sidewalks, and streets-contractors
- Concrete construction: roads, highways, public sidewalks, and
- Grading for highways, streets, and airport runways-contractors
- Guardrail construction on highways-contractors
- Highway construction, except elevated
- Highway signs, installation of-contractors
- Parkway construction
- Paving construction-contractors
- Surfacing street and highways-contractors
- Road construction, except elevated
- Sidewalk construction, public-contractors
- Street maintenance or repair-contractors
- Street paving-contractors
Description for 1622 Bridge, Tunnel And Elevated Highway Construction
Division C: Construction | Major Group 16: Heavy Construction Other Than Building Construction Contractors | Industry Group 162: Heavy Construction, Except Highway And Street
1622: Bridge, Tunnel And Elevated Highway Construction: General contractors primarily engaged in the construction of bridges; viaducts; elevated highways; and highway, pedestrian, and railway tunnels. General contractors engaged in subway construction are classified in Industry 1629. Special trade contractors primarily engaged in guardrail construction or installation of highway signs is classified in Industry 1611.
- Abutment construction
- Bridge construction
- Causeway construction on structural supports
- Highway construction, elevated
- Overpass construction
- Trestle construction
- Tunnel construction
- Underpass construction
- Viaduct construction
Road Contractors Insurance - The Bottom Line
To protect your operations, employees and your clients, having the right road contractors insurance coverage is important. To learn what types of options are available to you, how much coverage you should invest in and the cost - speak to a reputable commercial insurance broker.
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).