The answer may shake you up. Painters are usually classified as Artisan Contractors. The General Liability Insurance for a self-employed Painter would be around $700 per year. This would be for a basic General Liability with a $1 Million policy limit. I am sure that is a lot less than you thought it would be. Think of how well you will sleep at night knowing your business and personal assets are protected for less than $75 a month!
This is just a ballpark cost of a basic policy. You do need to realize this is for a policy that has the basic coverage you must have.
Like ordering a pizza the additional types of coverages you can add to this basic policy are diverse. Think of the basic general liability policy as a cheese pizza. There is a wide range of options from just a basic cheese to a fully loaded pie. You need to decide what is right for you. Our agents can discuss with you the various options and get the right policy for a particular situation.
Painter Contractor Insurance Cost
The following are the factors that will determine the actual price of a policy beyond the basic level.
- The number of employees you have. The larger your business is the more employees you have will have. The more employees the more the insurance will cost.
- The type of work you perform. Some work is inherently more dangerous. It is perfectly logical that a Painting contractor who does mainly exterior work on multi-story buildings would be charged more for Painter’s Insurance than a contractor who just does interior residential work. There are obviously many more things that can go wrong for the exterior commercial painter.
- Contractual requirements. After you have been in business for a while you may have the opportunity to bid on larger jobs. These jobs especially when you are being hired as a subcontractor for a large project will require you to have increased policy limits and additional coverages. This fact should not worry you too much as these costs should be built into your bid. Do not fret it is easy to add these coverages to your existing policy. It is important you are aware of this before you bid. The insurance requirements are often overlooked in the bidding process. If you fail to account for these costs, you may find yourself in a bind when you get the estimates for the insurance and they are significant. You can find out these costs upfront. When you know what these costs are, you add in these costs to your bid. This way there will be no unpleasant surprises.
- Amount of work performed. The more jobs you do the more revenue you will earn. This will make for a higher premium. The work you perform (increased sales) means more opportunities for something to go wrong. As a result of the possibility of more things going wrong, your premium will increase.
- Types of Coverage. There are many additional policies and coverages that can be added to basic Painter’s General Liability Insurance. These include workers compensation, commercial auto, inland marine insurance and Surety Bonds.
General Liability Insurance for Painters
This is the most basic insurance coverage. It protects you from claims arising from your work. There are generally two types of claims. The first is damage you do to someone’s property in the course of your work. For example one of your workers is on a ladder and falls off with a gallon of paint ruining a customers furniture and carpet. If you did not have a Painter’s General Liability Insurance the repairs would come out of your pocket. If you had Insurance you would be covered in this example.
The other coverage is injuries to people from your work. An example of this is if you were painting the exterior of a home and you dropped a paint can on someone below. You would have coverage under your Painter General Liability Insurance policy.
The other main benefit of this policy is that they generally contain a duty to defend. What this means in its simplest terms is that if a third party files a lawsuit against claiming you damaged their property or person the insurance company will hire a lawyer to defend you against such claims. More importantly, the cost of the lawyers is in most cases covered under your insurance policy with no cost to you other than your deductible. If you do not have insurance you will have to hire a lawyer with your own money. It goes without saying how expensive lawyers can be and how quickly the costs can escalate.
This needed if you use your vehicle to transport work supplies like paint, ladders and other equipment. Coverage is available for a variety of vehicles including cargo vans and pickup trucks. Do not make the mistake of only having personal liability coverage on your work vehicle. If you have a claim it would be denied if the insurance company finds out you were using a vehicle for commercial purposes.
This insurance is required by law in most States if you have employees. This covers your workers if they are injured on the job. As a side note, the general liability insurance does not offer your employees coverage if they are injured on the job. The cost of this insurance, for the most part, is based on the following:
- Workers compensation insurance is based on how much payroll you have. The greater the amount of payroll the larger the worker’s compensation premium.
- Type of Work. Workers Compensation insurers classify different types of work into different class codes. These class codes dictate what percentage the total payroll will be multiplied by to determine the premium. So, for example, something low risk as a clerical worker. The percentage might only be 1% of payroll. So if the total payroll was $100,000 the premium would be $1,000 for the year. In some occupations like roofing the percentage can be 80%, So if there was $100,000 the premium would be $80,000. Workers Compensation Insurance for Painter’s is generally around 10% of payroll.
- Experience Modification. This takes into account your claim history. The basic Experience Modification is 1. If you have a claims free history you experience modification will be less than one. If you have a bad claim and safety history your experience modification will be greater than one. To help you visualize this I will use the example from above. Painter A has a good safety history so her experience modification is .7. So for a $100,000 in payroll, she will pay $7,000 for a year. ($100,000 X 10%=$10,000 X .7=$7,000).
Painter’s B with bad safety record has experience modification of 1.3. So he will pay $13,000 a year for the same coverage.
($100,000 X 10%=$10,000 X 1.3=$13,000).
Inland Marine Insurance
Inland Marine Insurance is a type of coverage for the property you use in your business to make your living. If all your tools where stolen or destroyed you would be in a tough spot. No tools mean no way to make money. No money means no way to buy new tools. Inland Marine Insurance for Painter’s covers your tools if they are lost or destroyed.
Surety bonds are not insurance. They are separate policies and are additional costs. They are usually required in specific situations. There are four Basic Types:
Painter’s License Bond
Painter’s may sometimes be required to be licensed or registered. In these instances, the government entity may require a bond to be posted.
Painter’s Permit Bond
Painter’s when obtaining a permit before starting a job may be required to provide a bond to the City before they will issue a permit for a project.
Painter’s Payment and Performance Bonds
If you are doing a project for a GC or a Government entity they may require a bond to ensure the work is completed. These types of bonds are based on credit. If your credit score is above 700 and job is under $400,000 they can be obtained with just a one page application and signature.
Employee Dishonesty Bond for Painters
This is a great way to differentiate you from your competition. Everyone has seen the ads and trucks stating Bob’s is licensed bonded and insured. This bond covers your clients in the event one of your employees steals anything from the work site or customers home. For smaller contractors, I suggest they laminate the bond and show it to their clients along with the certificate of insurance when they are presenting their estimates. This goes a long way to make clients comfortable in hiring you. You may find that you even get you the job even though your estimate is not the lowest.