Excavation Contractor Insurance

Excavation Contractor Insurance

Excavation contractors tackle tough jobs from excavation to grading and demolitions. Significant liability risks come with the territory, which is why you need a customized insurance policy to protect your business.

Zensurance - Excavation Contractor

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Insurance for excavation contractors

Owners of excavation, concrete and paving, and site preparation businesses know that not everything they see is always clear. Whether digging up sites and foundations for new buildings, breaking concrete, or demolishing existing structures, trenching and excavation work is dangerous work that poses many risks including cave-ins, explosions, injuries, slips, trips, and falls, as well as property damage caused by your operations. Insurance for excavation contractors is necessary to protect your business from liability risks, lawsuits, and unexpected mishaps.

Excavation contractor insurance is a tailored policy package that provides coverage for a broad range of liability risks and protection for your equipment and assets. Having the right type of policy can help your small business withstand unforeseen circumstances and provide financial support when you need it.

Getting a comprehensive excavation contractors’ insurance policy that’s customized to your needs may include several types of insurance, including:

  • Commercial General Liability (CGL) Insurance: Excavation sites create several hazards for the general public and could damage adjacent properties. That’s why CGL insurance is vital. It provides coverage for third-party bodily injury or property damage lawsuits. If you are sued, CGL pays for your legal defence, the financial outcome of a lawsuit, and an injured person’s medical expenses or damages to a nearby property. It may also include a completed operations component, whereby if someone is injured or property damage is discovered resulting from your work after you’ve completed the project, you are covered.
  • Commercial Property Insurance: If you own your business’s commercial property, commercial property insurance provides financial support to replace or repair the property if it is damaged by an insured peril like a flood, fire, or severe weather, as well as vandalism and theft. It also covers the building’s contents such as computers, furniture, tools, equipment, and inventory. Commercial property coverage also extends to protect others’ property that is under your care, control, or custody.

Other types of coverages you may wish to include to produce a well-rounded policy may involve:

  • Tools and Equipment Insurance: This policy provides coverage to replace, or repair lost, stolen, or damaged equipment and tools, accessories, or others’ property in your care.
  • Pollution Liability Insurance: Excavation work will have an impact on the environment, exposing you to environmental liability claims based on the nature of what you do. Pollution liability insurance covers clean-up costs, third-party bodily injuries (such as illnesses arising from your work), or damage to an adjacent property caused by pollution or toxic substances from the excavation site.
  • Commercial Auto Insurance: Excavation companies typically have specialized vehicles that are considered mobile equipment, such as backhoes, bulldozers, tractors, and excavators. That means they also rely on heavy vehicles and trailers to transport these machines to various job sites driving on public roads and highways. Commercial auto insurance is essential to protect these vehicles as well as protect you from any resulting third-party bodily injuries or property damage that happens if one of your employees gets into an accident and is deemed at fault for it.
  • Equipment Breakdown Insurance: Equipment breakdown coverage is designed to protect a wide range of machinery from an unexpected malfunction caused by electrical or mechanical failure.

The cost of an excavation business insurance policy depends on several factors, including:

  • Your business’s size and location
  • How many employees you have
  • The types of excavation services you provide
  • The types of excavation vehicles and machinery you have
  • Years of experience
  • Your annual and projected revenues
  • How many previous insurance claims you have filed

Different insurers offer varying premiums based on these and other risk-related factors. That’s why it’s worthwhile to have a licensed broker shop around on your behalf and find a policy that suits your needs at an affordable price.

Business insurance is vital for excavation contractors regardless of the type of excavations they perform, including:

  • Basement excavation
  • Bridge excavation
  • Channel excavation
  • Cut and fill excavation
  • Drainage and structure excavation
  • Dredging
  • Earth excavation
  • Footing excavation
  • Muck excavation
  • Road excavation
  • Rock excavation
  • Stripping
  • Topsoil excavation
  • Trench excavation
  • Underground excavation

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Common claims scenarios


Problem: While passing by your excavation site, a pedestrian is injured by debris that flies out of the trench you’re dredging. Their injuries require medical attention, and they are unable to work as a result of the injury. They sue you for bodily damage and lost wages.

Outcome: Your commercial general liability insurance may pay for the injured person’s medical expenses and lost wages as well as your legal expenses defending yourself in court.

Construction site on fire

Problem: Overnight, a fire breaks out at your mobile office at the construction site that causes extensive damage to the building, its contents, and the equipment in your storage lot.

Outcome: Your commercial property insurance may pay for the cost to repair your office, repair or replace the contents in your office, as well as the damaged equipment in your storage lot.

residential excavation site

Problem: You completed a job at a construction site. While work at the site continues, a young man decides to take a shortcut across the property but falls into the pit you excavated for a basement and is hurt. He decides to sue your company for his injuries.

Outcome: Your commercial general liability insurance may pay for the injured man’s medical expenses and your legal fees.

Frequently asked questions

If I rent out my mini excavator, will my insurance provide equipment coverage?

Some insurance companies are okay with insuring your mini excavator if you rent it to another party. However, you should ensure you are added to the individual’s or company’s policy you are renting the mini excavator to as an additional insured. That way, if a claim arises, it is that party’s insurance that will cover the cost for the loss or damage.

If my excavation project requires removing trees, am I covered?

It may be necessary to include tree removal insurance to your policy for this type of operation if it’s included in the excavation process. That will ensure you are accurately covered. Speak to a licensed broker about your policy and inquire if you need to add tree removal coverage to your overall policy.

Will my commercial general liability cover grading of land as an additional service?

As part of your company’s services, the grading of land must be stated to your insurance company. It’s not an unusual request since grading operations correlate with excavation work, but it’s always vital to let your broker know in advance what type of work you are doing to ensure maximum protection.

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