Contractor Insurance Coverage Adequacy Calculator

ANA›Life Services Authority›National Calculator Authority›Contractor Insurance Coverage Adequacy Calculator

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Contractor Insurance Coverage Adequacy Calculator

Evaluate whether your current insurance coverage is adequate for your contracting business based on project values, payroll, risk exposure, and industry benchmarks.

Annual Revenue / Contract Value ($)

Largest Single Project Value ($)

Annual Payroll ($)

Number of Employees (including owner)

Primary Work Type

General Construction / Carpentry Roofing Electrical Plumbing / HVAC Demolition / Excavation Painting / Drywall Concrete / Masonry Landscaping / Irrigation

Primary Work Location

Residential Commercial Industrial Government / Public Works

Current General Liability Coverage ($)

Current Workers' Comp Coverage (Annual Premium $)

Current Umbrella / Excess Liability Coverage ($)

Total Equipment / Tools Value ($)

Do You Use Subcontractors?

No Yes

Calculate Coverage Adequacy

function conCalc() { // --- Inputs --- const revenue = parseFloat(document.getElementById('con-annual-revenue').value); const largestProject = parseFloat(document.getElementById('con-largest-project').value); const payroll = parseFloat(document.getElementById('con-annual-payroll').value); const employees = parseInt(document.getElementById('con-num-employees').value); const riskFactor = parseFloat(document.getElementById('con-work-type').value); const location = document.getElementById('con-work-location').value; const currentGL = parseFloat(document.getElementById('con-current-gl').value) || 0; const currentWC = parseFloat(document.getElementById('con-current-wc').value) || 0; const currentUmbrella= parseFloat(document.getElementById('con-current-umbrella').value) || 0; const equipmentValue = parseFloat(document.getElementById('con-equipment-value').value) || 0; const usesSubs = document.getElementById('con-subcontractors').value;

// --- Validation --- const errors = []; if (isNaN(revenue) || revenue revenue) errors.push("Largest single project cannot exceed annual revenue.");

if (errors.length > 0) { document.getElementById('con-result').innerHTML = 'Please fix the following:' + errors.map(e => '').join('') + ''; return; }

// --- Location multiplier --- const locationMultiplier = { residential: 1.0, commercial: 1.25, industrial: 1.5, government: 1.4 }[location];

// --- Subcontractor adjustment --- const subAdj = usesSubs === 'yes' ? 1.15 : 1.0;

// ============================================================ // 1. RECOMMENDED GENERAL LIABILITY (GL) // Base: Greater of (revenue × 2%) or $1,000,000 minimum // Adjusted by risk factor, location, and subcontractor use // Industry rule: GL limit ≥ largest single project value // ============================================================ const glBase = Math.max(revenue * 0.02, 1000000); const glRecommended = Math.max( glBase * riskFactor * locationMultiplier * subAdj, largestProject, 1000000 );

// Round up to nearest $500,000 const glRounded = Math.ceil(glRecommended / 500000) * 500000;

// ============================================================ // 2. RECOMMENDED WORKERS' COMPENSATION PREMIUM // Standard formula: (Payroll / 100) × Class Rate // Class rates by risk factor (approximate NCCI rates): // 0.8 → $4.50/100, 0.9 → $5.50/100, 1.0 → $7.00/100 // 1.1 → $8.50/100, 1.2 → $12.00/100, 1.3 → $14.00/100 // 1.5 → $18.00/100 // Experience modifier assumed 1.0 (neutral) // ============================================================ const wcRateMap = { '0.8': 4.50, '0.9': 5.50, '1.0': 7.00, '1.1': 8.50, '1.2': 12.00, '1.3': 14.00, '1.5': 18.00 }; const wcRate = wcRateMap[riskFactor.toFixed(1)] || 7.00; const wcRecommended = (payroll / 100) * wcRate;

// ============================================================ // 3. RECOMMENDED UMBRELLA / EXCESS LIABILITY // Triggered when: revenue > $500K OR largest project > $500K // OR commercial/industrial/government work // Recommended: max(revenue × 1.5, largestProject × 2) rounded // Minimum umbrella: $1,000,000; typical: $1M–$5M // ============================================================ const needsUmbrella = revenue > 500000 || largestProject > 500000 || location !== 'residential' || usesSubs === 'yes'; let umbrellaRecommended = 0; if (needsUmbrella) { const umbrellaBase = Math.max(revenue * 1.5, largestProject * 2, 1000000); umbrellaRecommended = Math.ceil(umbrellaBase / 1000000) * 1000000; umbrellaRecommended = Math.min(umbrellaRecommended, 5000000); // cap at $5M typical }

// ============================================================ // 4. EQUIPMENT / INLAND MARINE COVERAGE // Recommended: 100% of equipment replacement value // ============================================================ const equipmentRecommended = equipmentValue;

// ============================================================
// 5. COVERAGE ADEQUACY SCORES (0–100)
// GL Score: currentGL / glRounded × 100
// WC Score: currentWC / wcRecommended × 100 (if payroll > 0)
// Umbrella Score: if needed, currentUmbrella / umbrellaRecommended × 100
// ============================================================
const glScore = Math.min((currentGL / glRounded) * 100, 100);
const wcScore = payroll > 0 ? Math.min((currentWC / wcRecommended) * 100, 100) : 100;
const umbrellaScore = needsUmbrella
? Math.min((currentUmbrella / umbrellaRecommended) * 100, 100)
100;

// Weighted overall score // GL: 40%, WC: 30%, Umbrella: 30% const overallScore = (glScore * 0.40) + (wcScore * 0.30) + (umbrellaScore * 0.30);

// --- GL Gap --- const glGap = Math.max(glRounded - currentGL, 0); const wcGap = Math.max(wcRecommended - currentWC, 0); const umbrellaGap = needsUmbrella ? Math.max(umbrellaRecommended - currentUmbrella, 0) : 0;

// --- Rating label --- let rating, ratingClass; if (overallScore >= 90) { rating = "✅ Well Covered"; ratingClass = "calc-good"; } else if (overallScore >= 70) { rating = "⚠️ Moderately Covered"; ratingClass = "calc-warning"; } else if (overallScore >= 50) { rating = "🔶 Under-Covered"; ratingClass = "calc-warning"; } else { rating = "🚨 Significantly Under-Covered"; ratingClass = "calc-bad"; }

// --- Format helpers --- const fmt = v => '$' + v.toLocaleString('en-US', {minimumFractionDigits: 0, maximumFractionDigits: 0}); const fmtD = v => '$' + v.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2}); const pct = v => v.toFixed(1) + '%';

// --- Score bar --- const barColor = overallScore >= 90 ? '#27ae60' : overallScore >= 70 ? '#f39c12' : '#e74c3c'; const scoreBar = `

${overallScore.toFixed(1)}%

`;

// --- Recommendations --- const recs = []; if (glGap > 0) recs.push(- Increase General Liability coverage by **${fmt(glGap)}** to reach recommended **${fmt(glRounded)}**.); if (wcGap > 0 && payroll > 0) recs.push(- Increase Workers' Comp premium budget by **${fmtD(wcGap)}/yr** (recommended annual premium: **${fmtD(wcRecommended)}**).); if (umbrellaGap > 0) recs.push(- Add or increase Umbrella/Excess Liability by **${fmt(umbrellaGap)}** to reach **${fmt(umbrellaRecommended)}**.); if (equipmentValue > 0) recs.push(- Ensure Inland Marine / Equipment coverage of at least **${fmt(equipmentRecommended)}** for tools and equipment.); if (usesSubs === 'yes') recs.push(); if (recs.length === 0) recs.push();

document.getElementById('con-result').innerHTML = ` ### Coverage Adequacy Results

Overall Adequacy Rating: ${rating} ${scoreBar} Score: ${pct(overallScore)} (GL 40% + WC 30% + Umbrella 30%)

Coverage TypeCurrentRecommendedGapScore

General Liability ${fmt(currentGL)} ${fmt(glRounded)} 0?'#e74c3c':'#27ae60'}">${glGap > 0 ? '-'+fmt(glGap) : '✅ Adequate'} ${pct(glScore)}

Workers' Comp (Annual Premium) ${payroll > 0 ? fmtD(currentWC) : 'N/A'} ${payroll > 0 ? fmtD(wcRecommended) : 'N/A'} 0?'#e74c3c':'#27ae60'}">${payroll > 0 ? (wcGap > 0 ? '-'+fmtD(wcGap) : '✅ Adequate') : 'N/A'} ${payroll > 0 ? pct(wcScore) : 'N/A'}

Umbrella / Excess Liability ${needsUmbrella ? fmt(currentUmbrella) : 'Not Required'} ${needsUmbrella ? fmt(umbrellaRecommended) : 'Not Required'} 0?'#e74c3c':'#27ae60'}">${needsUmbrella ? (umbrellaGap > 0 ? '-'+fmt(umbrellaGap) : '✅ Adequate') : '—'} ${needsUmbrella ? pct(umbrellaScore) : '—'}

Equipment / Inland Marine — ${fmt(equipmentRecommended)} Verify separately —

Key Inputs Used: Annual Revenue: ${fmt(revenue)}  |  Largest Project: ${fmt(largestProject)}  |  Payroll: ${fmt(payroll)} Risk Factor: ${riskFactor}×  |  Location Multiplier: ${locationMultiplier}×  |  WC Rate: $${wcRate.toFixed(2)}/100 payroll

Recommendations: ${recs.join('')}

`; }

#### Formulas Used

Recommended General Liability (GL): GLbase = max(Annual Revenue × 2%, $1,000,000) GLrecommended = max(GLbase × Risk Factor × Location Multiplier × Sub Adjustment, Largest Project, $1,000,000) Rounded up to nearest $500,000

Recommended Workers' Compensation Premium: WC Premium = (Annual Payroll ÷ 100) × Class Rate Class rates range from $4.50 (low-risk) to $18.00 (demolition) per $100 payroll, based on NCCI classification.

Recommended Umbrella / Excess Liability: Required when: Revenue > $500K, Largest Project > $500K, or non-residential / subcontractor work Umbrella = max(Revenue × 1.5, Largest Project × 2, $1,000,000), capped at $5,000,000, rounded to nearest $1M

Coverage Adequacy Score: GL Score = min(Current GL ÷ Recommended GL × 100, 100) WC Score = min(Current WC Premium ÷ Recommended WC Premium × 100, 100) Umbrella Score = min(Current Umbrella ÷ Recommended Umbrella × 100, 100) Overall Score = (GL Score × 40%) + (WC Score × 30%) + (Umbrella Score × 30%)

#### Assumptions & References

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References

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