What is excavation insurance?
Excavation insurance is important for managing risks in your excavation projects. It protects against unexpected events like ground collapse, theft or accidental damage, giving you peace of mind so you can focus on your work. This insurance helps keep your project on track even when surprises happen.
Excavation insurance is a group of different policies that will protect you and your business from certain risks. For example, if you accidentally damage underground pipes, your commercial general liability insurance will cover the repair costs. It often includes coverage for tools and equipment, and you can add more protection, like commercial property insurance, to protect your office, warehouse or storage facility from accidents.
Who needs excavation insurance?
Anyone working in an excavation-based business will need an excavation insurance package. Some of the professions include:
- Independent contractors: If you're working solo as a freelancer or sole proprietor, you'll want this insurance.
- Excavation companies: Offering various excavation services to residential and commercial clients, this insurance is crucial.
- Subcontractors: Those who are hired for specific tasks in larger projects will need their own insurance since they are not an employee of the general contractor.
What does excavation insurance cover?
Excavation insurance helps protect your business by covering different areas:
- Commercial general liability: This is often needed and helps if someone claims that your work caused property damage or injury. It can cover everyone who works for you, but having more employees might mean higher costs.
- Professional liability: Also called errors and omissions insurance, it covers situations where someone says your work wasn’t done properly. It helps cover costs and legal issues if a client isn't satisfied with your work.
- Tools and equipment: This pays you back if your tools or equipment are lost, stolen, or damaged. Tools worth less than $1,500 are included in this, while more expensive items are considered equipment. Check your policy for details.
- Builder’s risk: It covers damage or loss at excavation sites, protecting against things like natural disasters, fire, and theft.
- Worker's compensation: Required in most places if you have employees, it covers medical bills and lost wages if someone gets hurt while working for you.
What are some recommended add-ons for excavation insurance?
Consider these add-ons based on your business needs:
- Commercial property: This protects your business premises, like an office or warehouse, and its contents. For example, if water damage occurs, this insurance covers repair and replacement costs.
- Commercial auto: If you have company vehicles, it covers accidents, theft, or damage. If your service truck gets into an accident, this insurance helps with repair costs and damages to work supplies.
- Business interruption: It protects against income loss from unexpected events like fires. If a fire stops your project, it helps cover expenses like rent and salaries.
How much does excavation insurance cost in Canada?
The cost of excavation insurance in Canada varies based on several factors, such as the size of your business, the services you provide, your claims history, and the type of coverage you select. Here are some general estimates:
- General liability insurance: Usually starts at about $450 per year for $2 million in coverage.
- Comprehensive insurance packages: Can start at around $575 per year.
What factors determine excavation insurance rates?
The price of excavation insurance in Canada depends on different factors:
- Business equipment and property: The value and type of equipment you use will affect your insurance costs, especially if you're looking for a higher coverage limit. More expensive or specialized equipment will raise the premiums since they are more costly to replace.
- Revenue: Higher business revenue can increase your insurance quotes because insurers see it as more risk, as you're handling more and larger projects.
- Deductible: The amount you pay out-of-pocket before insurance kicks in. A higher deductible will lower your premium since the insurer will pay less in case of a claim.
- Location: Your business location can affect costs. Busier areas with more people or those prone to natural disasters are often riskier to insure.
- Years in operation: Established businesses with a good track record often receive lower premiums than newer ones.
- Claims history: Frequent claims will increase your insurance costs over time.
How does excavation insurance work?
Excavation insurance provides financial protection against unexpected incidents. When you file a claim, your insurer assesses the situation, and if it’s covered, they pay for expenses up to your policy’s limits. This helps you manage losses and keeps your business running smoothly.
How to get the cheapest excavation insurance quote?
To get the cheapest excavation insurance quote in Canada, consider these steps:
- Compare multiple quotes: Use online platforms like RATESDOTCA to compare quotes from different insurers and find the best rate.
- Bundle policies: If you need multiple types of insurance (like general liability and commercial auto), getting them from the same provider can often result in discounts.
- Increase your deductible: Opting for a higher deductible can lower your premium. Ensure you can afford the deductible if you need to make a claim.
- Maintain a good claims history: A good claims history can lead to lower rates. Implement safety measures to reduce accidents and claims.
- Choose the right coverage: Only pay for the coverage your business needs. For instance, if you don’t use vehicles for your business, you can skip commercial auto insurance.
- Ask about discounts: Some insurers offer discounts for paying annually instead of monthly or maintaining a good safety record.
