Site preparation contractors perform many activities that could be dangerous, such as excavation, demolition, land clearing, and grading. While reinforcing safe working practices can reduce the likelihood of incidents, it’s impossible to completely avoid all risk. If a catastrophe does occur, having a wide range of business insurance policies in place can provide invaluable financial support to help your company continue operating.

What insurance coverage do I need as a site preparation contractor?

There are many types of insurance coverage to consider, but these policies are particularly relevant to site preparation contractors:

General Liability Insurance

General liability insurance is particularly crucial for site preparation contractors because their activities can pose a serious danger to other people and property. Excavation and demolition can damage buildings in the area, and equipment and debris on the construction site could lead to injuries for anyone who passes through. 

General liability insurance provides coverage for incidents of third-party property damage, bodily injury, personal injury, and advertising injury that could arise in the course of your work. If your business is sued, general liability insurance can cover legal fees, damages, and medical payments in the case of an injury. General liability can also cover non-physical personal and advertising injuries such as libel, slander, or copyright infringement.

General liability insurance also features coverage for products and completed operations, which is very relevant to site preparation activities. Since site excavation contractors prepare sites for other construction work to commence, there’s a risk that people working on the site in the future could be injured or property could be damaged as a result of your work. If someone is injured or property is damaged as a result of your work after it is completed, this aspect of general liability insurance would cover it. 

As site preparation contractors often use mobile equipment such as excavators and backhoes, it’s essential to be aware of how liability insurance applies to this equipment. Typically, general liability insurance would cover bodily injury or property damage caused by mobile equipment while on a worksite or at your premises. However, incidents that occur while mobile equipment is driven on public roads are usually excluded from general liability coverage. You would need a commercial auto policy to cover accidents that happen on a public road.

Examples:

• Bodily injury: A pedestrian is walking on the sidewalk adjacent to your construction site and one of your backhoe drivers accidentally drives into him and knocks him down. Your general liability insurance would cover medical costs and legal fees if the person sues.
• Property damage: Your company is demolishing a building, and part of this involves setting explosives. The shock from the explosions ends up causing damage to a neighboring property’s retaining wall. Your general liability insurance will cover the damages.
• Products and completed operations: Your excavation team has prepared a site for the foundation to be poured. The excavation work, however, has weakened an adjacent building, causing stress fractures in the building’s lower level. A few days later, one of the walls in the building collapses, injuring several occupants inside the building. Your company is sued for damages. General liability would cover your legal fees and settlement costs. 

Workers’ Compensation Insurance

Site preparation work can be dangerous for employees and has the potential to cause severe injuries. Employees are at risk for injuries from landslides, sinkholes, demolition work, lifting from loading or unloading materials, tripping or slipping, flying debris, and operating heavy machinery. It’s important to enforce safe working practices, but no matter how careful you and your employees are, accidents can happen. 

Workers’ compensation insurance is particularly crucial for site preparation contractors, as well as a legal requirement in almost every state for companies that employ others. If your employees are injured or fall ill on the job, workers’ comp will provide funds for medical expenses and a portion of lost income during recovery. Workers’ comp also provides financial benefits to surviving dependents if an employee dies in a work-related accident.

Example:

• An employee falls into a trench on a construction site, breaking an ankle. Workers’ comp would pay for medical bills and a portion of lost income while the employee recovers and is unable to work.

Commercial Auto Insurance

Site preparation contractors use a variety of vehicles to transport employees and equipment, remove debris, and perform work. Commercial auto insurance is necessary to protect you from auto-related claims. If one of your employees causes an accident while driving a company vehicle, your commercial auto insurance will pay for any resulting third-party bodily injury, property damage, or pollution cleanup. Commercial auto insurance also covers the value of the vehicle itself if it’s damaged or lost due to collisions, falling objects, theft, or other perils.

Site preparation contractors often use specialized vehicles that are considered mobile equipment, such as tractors, bulldozers, excavators, and backhoes. Liability insurance laws regarding these vehicles can vary by state. In general, if mobile equipment causes bodily injury or property damage on a worksite, your general liability insurance would cover the claim. However, many mobile equipment vehicles can be driven on public roads, and general liability insurance policies may exclude coverage for accidents that occur on public roadways. You would need commercial auto insurance for your machinery to cover these situations. Some states legally require you to purchase auto insurance for your mobile machinery.

Example:

• Your employee is driving a bulldozer on a public road when he accidentally crowds a bicyclist and knocks him into a ditch. The bicyclist’s shoulder is broken. Your commercial auto insurance would cover damages. 

Inland Marine Insurance

Site preparation contractors typically rely on a variety of tools and equipment that they transport from job site to job site. It’s important to be aware that commercial property insurance often excludes mobile property from coverage. Inland marine insurance is a key coverage that provides financial protection for your business property that does not remain at a fixed location and is not covered by a standard commercial property insurance policy. This could include equipment, tools, supplies, and other items that your business may need to transport to and from worksites or store at client sites. 

Example:

• During a severe storm, a tree falls and damages your front-end loader that was being stored overnight on a worksite. Inland marine insurance would cover the damages.

Pollution Liability Insurance

Pollution liability insurance covers bodily injury, property damage, and cleanup costs caused by pollutants that are released in the course of your company’s work. Site preparation contractors can cause pollution from hazardous materials present in demolished buildings, oil and fuel used in machinery, soil runoff, and other risks. If you are held liable for causing pollution-related damage, you may be required to pay for costly cleanup costs and fines. Pollution liability insurance will provide coverage if your company causes environmental damage.

Example:

• One of your excavators breaks down and leaks oil, contaminating neighboring property. Pollution liability insurance would cover cleanup costs and legal fees.

Commercial Property Insurance

Commercial property insurance can provide funds to replace or repair your business property if it is destroyed or damaged by a covered peril such as fire, explosion, storm, vandalism, and more. This coverage can protect your office location, supplies, computers, and other items. Commercial property insurance protects the value of:

• Buildings belonging to or leased by your company
• Contents of the building, including tools, equipment, and inventory
• Property of others while it is under your care, custody, or control

Example:

• A fire starts in your offices and spreads to your storage area, damaging your building, equipment, and tools. Your commercial property insurance would cover the loss.

Additional Coverages

• Equipment breakdown insurance covers repairs or replacement for equipment that breaks down, as well as lost business income while the equipment is out of commission. Since site preparation contractors may rely on key equipment to perform their work, it’s important to have coverage for this property. 
• A business owner’s policy combines general liability, property, business income, and extra expense coverage into a single package. If you run a small or midsize business, this type of insurance could help you obtain a wide range of coverage. Premiums for a business owner’s policy are typically cheaper than the cost of buying each coverage separately.
• Business income coverage will reimburse you for lost income and operating expenses if your business is forced to close due to a covered peril, such as fire, storm damage, or other property damage.

Pricing and Quotes

Pricing for site preparation contractors insurance will vary based on the type of insurance coverage and the risk profile of your business. Insurers consider factors such as:

• Business size
• Industry
• Location
• Number of employees
• Claims history

Businesses with higher risks will have higher premiums than those deemed lower risk. For example, a site preparation company with a history of frequent claims will face higher premiums. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.

In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer coverage for site preparation contractors:

Provider	General Liability	Professional Liability	Business Owner's Policy
Embroker	??	??	??
CoverageSmith	??	??	??
CoverWallet	??	??	??
Hiscox	??	??	??
Thimble	??	??	??

Final Word

Because site preparation activities present many serious risks to employees, the public, and the property of others, it’s essential to purchase a broad range of insurance policies that can provide financial protection if an incident arises. Although you may enforce safety regulations and work carefully, there’s always a chance that an accident or lawsuit could affect your company. With the right business insurance, you can feel confident that your business would be able to weather the financial consequences of any unfortunate events.