Contractor Insurance Coverage Calculator
Estimate recommended insurance coverage limits for general liability, workers' compensation, commercial auto, and umbrella policies based on your contracting business profile.
Formulas Used
General Liability (Per Occurrence):
Base GL = max(Revenue × 2, Largest Project × 3, $1,000,000)
Adjusted GL = Base GL × Trade Risk Factor × Work-Type Factor × Claims Surcharge
Final GL = Round up to nearest $500,000 (cap $10,000,000)
GL Aggregate: GL Occurrence × 2
Employer's Liability (Workers' Comp):
EL = $100,000 × [1 + (Employees − 1) × 0.05] × Trade Risk × Claims Surcharge
Rounded to nearest $100,000 (min $100K, max $1M)
Commercial Auto (CSL per vehicle):
CSL = $1,000,000 × Work-Type Factor × Claims Surcharge
Rounded to nearest $250,000 (min $500K, max $2M)
Umbrella / Excess Liability:
Base = max(GL Occurrence × 1.5, Largest Project × 2, $1,000,000)
Umbrella = Base × Work-Type Factor × Claims Surcharge
Rounded to nearest $1,000,000 (min $1M, max $25M)
WC Premium Estimate:
WC Premium ≈ (Employees × $55,000 payroll / 100) × Class Rate × Claims Surcharge
GL Premium Estimate:
GL Premium ≈ (Revenue / 1,000) × Trade GL Rate × Work-Type Factor × Claims Surcharge
Assumptions & References
- Trade risk multipliers based on ISO General Liability classification tiers and IRMI Contractor Insurance Guide risk rankings.
- GL limits follow the industry rule of thumb: coverage ≥ 2× annual revenue or ≥ 3× largest single project value (whichever is greater).
- Umbrella limits follow IRMI guidance: umbrella should be ≥ 1.5× primary GL occurrence limit.
- Workers' Compensation is statutory (unlimited) in most states; employer's liability limits shown are recommended minimums above statutory floors.
- Average employee payroll assumed at $55,000/year for WC premium estimation; actual payroll audit will determine final premium.
- WC class rates sourced from NCCI experience rating ranges by trade classification.
- Commercial auto CSL of $1,000,000 aligns with ISO Business Auto Policy standard contractor limits; FMCSA requires $750,000–$5,000,000 for vehicles over 10,001 lbs.
- GL premium rates per $1,000 revenue are industry benchmark averages; actual rates vary by state, experience modifier (EMR), and carrier.
- Claims surcharge factors (0%, 15%, 30%, 50%) reflect typical carrier underwriting adjustments for prior loss history.
- All figures are estimates for planning purposes only. Consult a licensed insurance broker for binding coverage quotes.