Contractors in Pennsylvania need insurance coverage to protect themselves and their businesses against potential liabilities. With so many insurance options available, it can be difficult to determine which one is the best fit for your business. This article outlines the 5 best contractor insurance options in Pennsylvania based on factors such as coverage options, affordability, and customer satisfaction. Whether you’re a small contractor just starting out or a larger firm looking to secure comprehensive coverage, these options will help you find the insurance protection you need.
- 5 best contractor insurance companies in Pennsylvania
- Are contractors required to be licensed in Pennsylvania?
- Are contractors in Pennsylvania required to have insurance?
- What insurance coverage contractors in Pennsylvania need to have
- What additional insurance coverages commercial contractors in Pennsylvania should consider?
- Are subcontractors required to have insurance? And what coverage do they need to have?
- Are contractors required to be bonded in Pennsylvania?
- How much does contractor insurance cost in Pennsylvania?
- What Pennsylvania contractors can do to find cheap coverage
5 best contractor insurance companies in Pennsylvania
Many companies offer contractor insurance in Pennsylvania, some offers all coverages that a contractor may need, but many offer just the main coverages such as general liability and workers comp insurance. We have done intensive research to understand these providers and these are our recommendations of the top 5 for your consideration:
- NEXT: Best for affordable liability coverage and excellent digital experience
- CoverWallet: Best brokerage firm if you want to compare several quotes online
- InsurePro: Best for cheap short-term liability coverage
- Smart Financial: Best if you prefer working with experienced agents
- Simply Business: Best brokerage firm to find low-cost coverage from reputable carriers
NEXT: Best for affordable liability coverage and excellent digital experience
NEXT is a specialty insurance provider that focuses on providing affordable liability coverage for small businesses, including contractors. NEXT is a newer carrier, was just founded in 2016. They started by offering liability insurance for all types of contractors and they offer the coverage completely online. The whole purchasing experience only takes a few minutes. They use AI to automate a lot of data gathering in the back end.
As they grow, they have expanded their product suite to include other coverage that contractors may need such as commerical auto insurance.
- Comprehensive liability coverage for contractors
- Affordable and competitive rates
- Great digital experience, from getting quotes, buying policies, or manging the policy, and filing a claim
- Download certificate of insurance within minutes after purchasing
- Other coverages that contractors may need such as commercial auto insurance are also available
- Limited coverage options. Not all coverages that contractors may need are available with NEXT
- Lack of personalized services through agents
CoverWallet: Best brokerage firm if you want to compare several quotes online
CoverWallet is another online insurance broker that allows customers to easily get and compare quotes from multiple insurers. They offer a variety of coverage options, including liability, workers’ compensation, and commercial auto insurance. CoverWallet has built a great quote comparison experience, making it easy for contractors to compare several quotes online
- Able to easily compare multiple quotes, a user-friendly website, and quick and easy online application process
- Partner with top-tier carriers
- Comprehensive digital capabilities from getting quotes, buying policies, and managing policies completely online
- Online quotes may not be available for some coverage. Sometimes you have to call to discuss quote options
- CoverWallet doesn’t handle claims. You have to file a claim directly with the carrier
InsurePro: Best for cheap short-term liability coverage
InsurePro is an online insurance broker that specializes in providing short-term coverage options for small businesses, including general contractors. You can choose to buy coverage for a few days or a few weeks.
They offer a variety of coverage options at competitive prices, making them a great choice for those looking for cheap coverage. If you are looking for liability coverage only, you should know that InsurePro offers short-term coverage, ie. you can buy coverage for just a day, a few days, or a few weeks. This option will save you a lot of money if you don’t need a traditional annual policy.
- Quick and easy online application process for general liability, workers comp, commercial auto, and commercial property coverage
- You can buy short-term liability coverage for a day, a few days, or a few weeks
- Very affordable rates compared to other options
- Coverage is from reputable carrier partners
- A relatively new brokerage firm, lack of a historical track record
- Other complicated coverages that general contractors may need such as builders’ risk insurance may not be available yet
Smart Financial: Best if you prefer working with experienced agents
Smart Financial is a brokerage firm that specializes in providing insurance for small businesses, including contractors. They work with experienced agents to help customers find the right coverage at an affordable price.
Smart Financial believes that an experienced agent can help contractors understand the coverages they may need and find the right coverage at the most reasonable rates from the 30+ carriers that they partner with.
- A wide network with experienced agents who have worked with thousands of contractors
- Offer a wide range of coverages that contractors may need, making it easy to buy everything in one place
- Partner with 30+ carriers, making it easy to find the right coverage at the reasonable rates
- Limited digital capabilities
- You have to work with an agent on phone. If you prefer doing everything online, this may not be a good option for you.
Simply Business: Best brokerage firm to find low-cost coverage from reputable carriers
Simply Business is an online insurance broker that specializes in providing insurance for small businesses, including contractors. As a brokerage firm, Simply Business parthers with 30+ reputable carriers who only only have excellent financial strength ratings, but tends to offer low-cost coverage as well. Simply Business focuses on helping its customers find the cheapest coverage from their carrier partners.
Simply Business offers a great digital experience, making it very easy for contractors to submit their information and get several quotes in a few mins.
- Easily compare quotes from multiple insurers
- All coverages that contractors may need are available with Simply Business, making it easy to buy all coverages in one place at an affordable price
- Partner with 30+ reputable carriers, giving contractors enough options to choose from
- Good customer satisfaction rating on trustpilot
- If you prefer a particular carrier that Simply Business doesn’t partner with, you need to look elsewhere
- It may take a bit longer than going directly to a carrier of your choice since Simply Busines has to pull quotes from several carriers to find the cheapest one.
Are contractors required to be licensed in Pennsylvania?
Yes, contractors are required to be licensed to operate in Pennsylvania. In Pennsylvania, a contractor who registers with the Pennsylvania Attorney General’s office is considered licensed.
The Pennsylvania Home Improvement Consumer Protection Act requires that contractors who engage in home improvement activities be registered with the Pennsylvania Attorney General’s office. This registration process helps to ensure that contractors are operating legally and that consumers are protected. In addition to registration, some contractors may also need to obtain additional licensing or certification depending on the type of work they perform. It’s best to check with the Pennsylvania Attorney General’s office or relevant state agency to determine if a license is required for a specific trade or service.
In addition to contractor licensing, contractors in Pennsylvania may also need to obtain other certifications or licenses depending on the type of work they perform. Some examples include:
- Electrical or plumbing contractor licenses – for contractors who perform electrical or plumbing work. Learn more about electrical contractor insurance and plumbing contractor insurance
- HVAC contractor licenses – for contractors who install or service heating, ventilation, and air conditioning systems. Learn more about HVAC contractor insurance
- Lead-Safe certification – for contractors who work on projects that involve lead-based paint.
- Asbestos abatement certification – for contractors who perform asbestos removal and abatement.
- OSHA certification – for contractors who perform hazardous or high-risk work, such as scaffold building.
It’s important to check with the relevant state agency or licensing board to determine if a license or certification is required for a specific trade or service in Pennsylvania. Failing to obtain the proper licenses or certifications can result in fines and penalties, so it’s important to ensure that all required licenses and certifications are obtained before starting work on any project.
What are the requirements for contractors in Pennsylvania to be licensed or registered?
To be licensed as a contractor in Pennsylvania, you may need to meet certain requirements, which can vary depending on the type of work you perform. Some common requirements include:
- Proof of insurance coverage – liability insurance and workers’ compensation insurance may be required.
- Proof of experience and education – you may need to provide evidence of your work experience and education in the construction trade.
- Criminal background check – some licensing agencies may conduct a background check to determine if you have any criminal history that would disqualify you from being licensed.
- Examination and testing – you may be required to pass a trade-specific exam or take courses to demonstrate your knowledge and expertise in the construction trade.
- Business registration and licensing fees – you may need to register your business with the relevant state agency and pay associated fees to obtain a license.
It’s important to check with the relevant state agency or licensing board to determine the specific requirements for obtaining a contractor’s license in Pennsylvania. The requirements may vary depending on the type of work you perform and the jurisdiction in which you operate. Failing to meet the necessary requirements can result in penalties and fines, so it’s important to ensure that all requirements are met before starting work as a licensed contractor in Pennsylvania.
Are contractors required to have insurance in Pennsylvania?
In Pennsylvania, contractors are required by law to carry insurance to be licensed or registered. To be registered, a contractor in Pennsylvania needs to have insurance policies showing at least $50,000 of personal injury liability coverage and $50,000 of property damage coverage (this is not related to contractor performance or quality of work)
Insurance provides financial protection for contractors and their businesses in the event of accidents, damages, or other liabilities that may occur on the job. It is also often a requirement for contractors to have insurance coverage in order to bid on or secure contracts for certain projects, especially commercial projects. Carrying adequate insurance coverage helps to ensure that contractors are prepared for unexpected events and can continue to operate their business if faced with a loss. It’s important for contractors to consider the type and amount of insurance coverage they need in order to fully protect their business and livelihood.
What insurance coverage contractors in Pennsylvania need to have:
Contractors in Pennsylvania are required to have the following insurance coverage:
General liability insurance
General liability insurance is crucial coverage for contractors in Pennsylvania. It protects against damages or injuries that may occur as a result of the contractor’s work, such as a slip and fall accident on a job site. This insurance can help cover the cost of legal fees and settlement costs if a third-party sues the contractor for damages. It is important to have enough coverage to protect against the potential financial burden of a liability claim, and to ensure that the contractor’s business can continue operating if faced with a loss.
Workers’ compensation insurance
Workers’ compensation insurance is another important coverage for contractors in Pennsylvania. It provides coverage for employees who are injured on the job, covering medical expenses and lost wages. This insurance is typically required by law for contractors who have employees, and it helps to protect both the employees and the contractor in the event of an injury on the job. By carrying workers’ compensation insurance, contractors can demonstrate their commitment to employee safety and well-being, and ensure that their business can continue operating if faced with a claim.
Commercial auto insurance
Commercial auto insurance is a necessary coverage for contractors who use vehicles for business purposes, such as transporting equipment or supplies to job sites. This insurance covers damages to vehicles and provides protection for the contractor in the event of an accident. It is important for contractors to carry adequate commercial auto insurance coverage, as the cost of repairing or replacing a damaged vehicle can be substantial, and the financial burden of an accident can be significant.
Inland marine insurance
Inland marine insurance is a coverage that is specifically designed for contractors who use equipment and tools on job sites. This insurance provides protection for these items if they are lost, damaged, or stolen while in transit or on the job site. Inland marine insurance can help contractors avoid the financial burden of having to replace valuable equipment and tools, and can ensure that their business can continue operating if faced with a loss.
Umbrella insurance is an additional coverage that can provide additional liability protection for contractors in Pennsylvania. This insurance provides coverage for liability claims that exceed the limits of other insurance policies, such as general liability insurance. By carrying umbrella insurance, contractors can ensure that they have enough coverage to protect against the financial burden of a liability claim, and that their business can continue operating if faced with a loss. Umbrella insurance is a cost-effective way to increase liability coverage, and it is an important coverage for contractors who want to ensure that they are fully protected.
What additional insurance coverages should commercial contractors in Pennsylvania consider?
In addition to the main coverages that contractors in Pennsylvania need to have we outlined above, below are some other insurance coverages that contractors, especially commercial ones, in Pennsylvania should consider having:
Business interruption insurance
Business interruption insurance can help protect commercial contractors in Pennsylvania from lost income in the event of a disaster or other event that causes their business to shut down temporarily. This coverage can provide compensation for lost income and expenses, allowing the contractor to continue operating while they recover from the loss.
Builder’s risk insurance
Builder’s risk insurance is a coverage that is specifically designed for contractors who are working on construction projects. It provides protection for the building and materials during the construction process, and can help cover the cost of repairs or replacements if the building or materials are damaged or destroyed.
Professional liability insurance
Professional liability insurance, also known as errors and omissions insurance, can help protect commercial contractors in Pennsylvania from claims related to professional negligence. This coverage can help cover the cost of legal fees and settlements if the contractor is sued for mistakes or oversights made on a project.
Pollution liability insurance
Pollution liability insurance can help protect commercial contractors in Pennsylvania from claims related to environmental damage or pollution caused by their work. This coverage can help cover the cost of cleaning up contaminated sites and can provide compensation for damages caused by pollution.
Cyber liability insurance
Cyber liability insurance can help protect commercial contractors in Pennsylvania from losses related to data breaches, cyber attacks, and other cyber threats. This coverage can provide compensation for the cost of responding to a breach, as well as for the cost of repairing damage to the contractor’s reputation.
Are insurance requirements different for independent contractors in Pennsylvania vs. general contractors?
Yes, insurance requirements can be different for general contractors and independent contractors in Pennsylvania.
Independent contractors may have different insurance requirements based on the type of work they are performing and the agreement they have with their clients. For example, some clients may require independent contractors to have liability insurance coverage to protect against potential claims.
General contractors, on the other hand, often have additional insurance requirements. Pennsylvania law requires general contractors with one or more employees to carry workers’ compensation insurance. General contractors may also be required to carry liability insurance and other types of insurance coverage based on the nature of their work and any contracts they have with clients or sub-contractors.
It is important for both general contractors and independent contractors in Pennsylvania to understand their insurance requirements and make sure they have adequate coverage in place to protect their business.
Are subcontractors required to have insurance? And what coverage do they need to have?
In Pennsylvania, subcontractors are not required by law to carry insurance. However, many general contractors require their subcontractors to carry liability insurance, workers’ compensation insurance, or both as a condition of doing business with them.
Liability insurance protects the subcontractor against third-party claims for property damage or personal injury that may arise from their work. Workers’ compensation insurance provides benefits to employees who are injured on the job.
The specific insurance requirements for subcontractors in Pennsylvania will vary depending on the agreement they have with the general contractor, the type of work they are performing, and any laws or regulations applicable to their industry.
It is important for subcontractors to understand their insurance requirements and ensure that they have adequate coverage in place to protect their business and comply with any contractual obligations.
Are contractors required to be bonded in Pennsylvania?
Bonding requirements for contractors in Pennsylvania vary depending on the type and size of the project. For some public construction projects, contractors may be required to have a performance bond to guarantee that they will complete the work as specified in the contract. Additionally, some private sector projects may also require bonding, depending on the terms of the contract and the requirements of the owner or client. It’s advisable for contractors to check with the relevant state or local authorities to determine if bonding is required for a specific project.
What does bonding cover in Pennsylvania?
Bonding in Pennsylvania serves as a guarantee that the contractor will fulfill their obligations and complete the project as specified in the contract. The bond provides protection for the owner or client in case the contractor fails to perform their duties. This can include failure to complete the work, poor workmanship, or failure to pay subcontractors or suppliers. If the contractor fails to fulfill their obligations, the owner or client can make a claim on the bond, which will provide compensation to help resolve the issue and ensure that the project is completed as intended. Bonding can also provide a level of assurance to owners and clients that the contractor is a reliable and trustworthy business partner.
How much does contractor insurance cost in Pennsylvania?
The average cost of a $300K liability insurance policy for contractors in Pennsylvania is $126 per month, or $1,512 per year. This is the most common insurance policy that almost all contractors in Pennsylvania have.
Most contractors in Pennsylvania pay between $86 to $1,040 per month for their liability insurance. It is a wide range because liability insurance cost for contractors varies significantly depending on several factors that we are discussing below.
If contractors also have workers comp and commercial auto insurance, they will pay more. Below are the average costs of these coverages for contractors in Pennsylvania:
|contractor insurance coverage||Average costs in Pennsylvania|
|liability insurance||$126 per month|
|Workers comp insurance||$148 per month per employee|
|Commercial auto insurance||$157 per month|
|Builders’ risk insurance||1-3% of the project value|
Keep in mind that these are just the averages. Your rates will be different. Be sure to shop around with a few companies or work with brokerage firms like Simply Business or Smart Financial to find the cheapest rate for your business.
What factors affect contractor insurance costs in Pennsylvania?
There are several factors that can affect the cost of contractor insurance in Pennsylvania. These include:
Type of contractor business
The type of contractor business can impact insurance costs in Pennsylvania, as different types of contractors have different risks and exposures. For example, a general contractor who works on large commercial projects will typically have higher insurance costs than a contractor who specializes in smaller residential projects.
Size of contractor business
The size of the contractor business can also affect insurance costs in Pennsylvania, as larger businesses are likely to have more employees, equipment, and materials, which can increase their exposure to risk.
The location of the project can also impact insurance costs in Pennsylvania, as different regions may have different risks and exposures. For example, a contractor working on a project in an area with high crime rates may face higher insurance costs than a contractor working in a safer area.
The type of project that the contractor is working on can also impact insurance costs in Pennsylvania, as different types of projects have different levels of risk and exposure. For example, a contractor working on a project that involves hazardous materials may face higher insurance costs than a contractor working on a standard commercial construction project.
The value of the project can also impact insurance costs in Pennsylvania, as larger projects are typically more complex and have a higher risk of loss. As the value of the project increases, so does the potential for financial loss, which can result in higher insurance costs.
Contractor’s risk management strategies
The contractor’s risk management strategies, including their safety programs and procedures, can also impact insurance costs in Pennsylvania. Contractors who have implemented effective risk management strategies are likely to face lower insurance costs, as they are seen as less risky by insurance providers.
How Pennsylvania contractors can find cheap coverage?
Contractor insurance can be costly, but Pennsylvania contractors can find ways to reduce their insurance costs by taking the following steps:
Shop around for quotes
Shopping around for quotes from multiple insurance providers is a good way to compare prices and find the best coverage options at an affordable price. Contractors can use online insurance comparison tools or work with an insurance broker to get quotes from multiple insurance companies.
Review coverage needs
Reviewing the coverage needs of the contractor’s business can help identify areas where they may not need as much coverage. For example, if the contractor has low amounts of equipment, they may not need as much equipment coverage. By carefully reviewing coverage needs, contractors can avoid paying for unnecessary coverage.
Bundling multiple insurance coverage, such as general liability and workers’ compensation, into one policy can often result in a lower overall cost. Insurance providers often offer discounts for bundling coverage, making it a cost-effective way to secure multiple types of insurance coverage.
Implement safe work practices
Implementing safe work practices and having an effective safety program can reduce the risk of accidents and losses, which can lead to lower insurance costs. Insurance providers often offer discounts for contractors who have demonstrated a commitment to safety.
Increasing the deductible amount on insurance policies can also help lower insurance costs. By accepting more financial responsibility for losses, contractors can lower their insurance costs. However, contractors should only consider increasing their deductible if they have the financial resources to pay a higher amount in the event of a loss.
Work with an insurance broker
Working with an insurance broker who specializes in contractor insurance can also help contractors to find affordable coverage. Insurance brokers have the expertise and experience to help contractors determine their insurance needs and to find the best coverage for their business at the most affordable price. They can also help contractors to negotiate lower insurance costs and to find special deals and discounts that may be available.
What Pennsylvania contractors should pay attention to when comparing several insurance quotes
When comparing several quotes to buy insurance, Pennsylvania contractors should pay attention to the following:
When purchasing insurance, Pennsylvania contractors should pay attention to the types of coverage they are buying, such as:
- Liability insurance: Covers third-party claims for property damage, personal injury, and other related expenses.
- Workers’ compensation insurance: Required by Pennsylvania law for businesses with one or more employees and provides benefits to employees who are injured on the job.
- Property damage insurance: Covers physical damage to buildings and other structures, as well as equipment and other property owned by the contractor.
- Vehicle insurance: Covers damages to vehicles used for business purposes, including liability, collision, and comprehensive coverage.
It is important for Pennsylvania contractors to make sure that their insurance coverage limits are adequate for the size and scope of their business. This will ensure that they are fully protected in the event of a claim.
When buying insurance, contractors should also review the policy exclusions to ensure that they understand what is not covered. In Pennsylvania, exclusions can vary depending on the type of policy and the insurance provider.
When choosing insurance, contractors should consider the deductible options available to them. The deductible is the amount the contractor pays out of pocket before their insurance coverage kicks in. Balancing the cost of insurance with the level of protection required is key, and selecting the right deductible can help achieve this.
It is important for Pennsylvania contractors to ensure that their insurance policy meets the requirements of any contracts they are bidding on. This includes general liability insurance, workers’ compensation insurance, and any other specific insurance requirements outlined in the contract.
In Pennsylvania, it is important for contractors to research insurance providers and ensure that they have a good reputation, are financially stable, and have a good track record. This will help ensure that contractors are protected in the event of a claim and can rely on their insurance provider to support them.
When purchasing insurance, Pennsylvania contractors should compare quotes from multiple providers to find the best coverage at the most reasonable price. Cost should not be the only factor in making a decision, but it is important to consider when budgeting for insurance expenses.
In conclusion, choosing the right insurance company is crucial for Pennsylvania contractors to protect themselves and their clients from potential liabilities and financial losses. The 5 best contractor insurance companies in Pennsylvania are Simply Business, CoverWallet, NEXT, Smart Financial, and InsurePro. Each of these companies offers a variety of coverage options at competitive prices, and it is important to do your research and choose the company that best fits your business needs. Remember to pay attention to coverage options, premiums, financial stability, claims process, and tailor coverage to your business needs.