MA Builders Insurance & Contractor Insurance

Get a Quote

FACT: 75 percent of businesses in the U.S.—including Massachusetts building and contracting firms—are significantly underinsured. Experts report that in the event of a disaster or a lawsuit, the coverage shortfall for these firms could be at least 40 percent. This is not our way of saying you should hurry out and buy more builders insurance. Rather, it’s just one indication of why working with the right partner is so important—especially as the market becomes more complex and competitive.

For dozens of Bay State contractors, we’ve proved ourselves to be not just capable, but essential partners. Our commercial insurance department supports a wide variety of contractors and builders—including both general contractors and artisan contractors with either a commercial or residential focus. Our clients’ coverage needs and risk profiles vary considerably, so we’ve built a team that can support large companies of 500+ employees, or smaller companies with just a handful of workers and vehicles.

Because MA builders insurance is among our core specializations, we believe in active participation within local trade groups and associations, including:

  • Builders & Remodelers Association of Greater Boston (BRAGB)
  • Homebuilders & Remodelers Association of Cape Cod (HBRACC)
  • National Association of the Remodeling Industry, Eastern Mass Chapter (EMNARI)
  • Associated Subcontractors of Massachusetts (ASM)
  • Utility Contractors Association of New England (UCANE)

The following outline answers some of the more basic questions surrounding builders insurance in Massachusetts specifically. If you’re an established contractor who is already familiar with these terms and concepts, we’d love to help answer your more in-depth questions via phone, email, or the contact form on this page. Brian Robertson, CIC, CRIS, is our resident expert on MA builders and contractors insurance. You can reach him at 508-339-2952 or brian@candsins.com.

What is builders insurance?

Builders insurance or “contractor insurance” are blanket terms used to describe a combination of business coverages (see the full list below). These coverages can be purchased separately (a la carte) or as part of a business package, depending on the size and complexity of your contracting firm.

At least two elements of builders insurance are required by Massachusetts law (workers’ comp and commercial auto). Other coverages noted below may not be required by the state, but are often required by your potential clients—whether they are residential clients or general contractors, seeking your service as a subcontractor. In most cases, additional coverages also make a lot of sense. More on this below.

Who needs builders insurance in MA?

Anyone who performs work for paying clients needs protection against injuries, property damage, natural disasters, lawsuits, and other potential losses. The size of your contracting operation and the type of services you offer will determine the specific coverages and limits that make sense for you. Our experts are well-versed in explaining the options for builders of all sizes—from a two-man team, to a two-hundred-employee company. Here are just a few of the contracting categories we advise:

  • General Contractors
  • Plumbing Contractors
  • HVAC Contractors
  • Electrical Contractors
  • Painting Contractors
  • Masonry, Stonework, Plastering Contractors
  • Remodeling & Carpentry Contractors
  • Flooring Contractors
  • Roofing and Siding Contractors
  • Water Well Drilling Contractors
  • Excavation Contractors
  • Demolition Contractors
  • Glass & Glazing Contractors
  • Concrete Contractors

What types of builders insurance do Massachusetts contractors typically need?

In the state of Massachusetts, builders and contractors are required by the Department of Industrial Accidents (DIA) to maintain workers’ compensation insurance (with the exception of certain members of LLCs or sole proprietors who may not need this coverage for themselves). Workers’ comp is designed to cover medical expenses and lost wages for employees who fall ill or suffer injury as a result of job-related activities. The cost of your workers comp premium is determined by the type of work your employees perform, your payroll (how many hours they work), and your “Experience Mod” (based on the number, frequency, and severity of claims you’ve had in the past).  Learn more about MA workers comp here.

  • Commercial Auto Insurance for Builders

Commercial auto insurance for builders and contractors isn’t just about finding the right coverages at a competitive rate; it’s also about service. More than any other piece of your overall insurance program, vehicles and equipment inventories need constant attention. MA trailer plates and commercial vehicle plates expire all at the same time, every year–creating a bit of a tidal wave at the Massachusetts RMV. Meanwhile, all throughout the year, contractors need support when purchasing or leasing new trucks, obtaining DOT numbers, adding new employee drivers, and revising company policies surrounding safe operations. At C&S, our inhouse RMV services and registry runners take much of this work off clients’ shoulders.

  • Commercial General Liability Insurance for Builders

General liability is an important coverage for builders and contractors, just as it is for most other types of businesses. Sometimes specified as a CGL (or “commercial general liability”) policy, this coverage protects against bodily injury, third-party property damage (i.e. other people’s stuff), and allegations of false advertising, libel, or slander. Often used interchangeably with “builders risk” insurance, general liability is NOT the same thing. Both serve a unique purpose (see more on builders risk below), and sometimes both are essential coverages–especially if your company works on ground-up, new construction projects.

CGL policies can be complex. If they’re not properly reviewed, the insertion of certain “forms” can exclude important, assumed coverages. For builders and contractors, a few examples of hidden exclusions include damage to “your work”, injury to subcontractors, and classification limitations which restrict coverage to just “your line of work.”

  • Builders Risk Insurance

Builders risk is essentially property insurance. But instead of covering specified property for an annual term period, it’s designed to cover property during the course of a given construction project. So for example, if you were building an addition for a homeowner, and a fire broke out midway through, the builders risk policy would likely cover your tools, equipment, and building supplies (whereas your CGL would not cover damage to these items, belonging to you). In that same event, builders risk would also cover the homeowner’s losses and the losses of any subs.

So who buys this coverage? Good question. Depending on the terms of your contract with a property owner, either you (the builder) or the owner himself needs to purchase builders risk insurance to protect hard and soft costs associated with the build. There are pros and cons to both methods, but regardless of who is the first-named insured, both parties (along with subcontractors, if necessary) can be named as insureds with insurable interests on the policy.

  • Contractor’s Professional Liability

As more builders adopt a design/build project delivery method (versus the traditional design-bid-build method), claims surrounding design risk and design liability are on the upswing. This concern is relevant whether your firm handles all the design itself (with architects on staff), or farms out design work to a licensed design professional (as part of a joint venture). More expressly, contractors who take responsibility for the design and construction of home/building projects now face a unique set of exposures—risks that are not covered by a standard, general liability policy. In these cases, professional liability (i.e. design error liability) can’t be addressed via risk transfer, either—not even with all the right elements in your subcontractor agreements.

Instead, design-build firms and co-ventures require contractor’s professional liability (CPL) coverage. CPL is designed to cover damages arising from the negligent acts, errors, and omissions related to the professional (design) services performed by or on behalf of the insured. For example, accepting architectural plans on behalf of your homeowner/building clients creates a guarantee that the completed construction of the plans will work as expected. If those architectural plans require the use of unsuitable materials, which go on to create damage (e.g. deflection in a beam cracks a ceiling), a professional liability exposure is created.

  • Commercial Umbrella Insurance

Basically, this is additional coverage that can supplement the limits of your other policies (commercial auto, general liability, etc.), as needed. In some cases, if a loss event is excluded by other policies, commercial umbrella coverage can respond to losses all on its own.

Builders and contractors aren’t immune to the heightened risks all today’s businesses are facing, when it comes to cyber attacks/cyber liability. In particular, builders may encounter physical and digital exposures via main offices and field offices, via drone use, via IoT devices (e.g. wearable employee monitoring tools and equipment tracking), or via lapses in their subcontractors’ security systems (i.e. unsecured access to your clients’ data). Cyber liability coverage is designed not only to respond to a variety of attacks (phishing scams, malware attacks, ransom ware attacks), but to prevent these from happening in the first place.

In 2018 alone, the EEOC (U.S. Equal Employment Opportunity Commission) received more than 76,000 charges of employment discrimination. Meanwhile, the agency secured $353.9 million for victims of discrimination in private and government workplaces, along with $55.6 million for victims of sexual harassment. And these totals only represent the settlements, not the legal costs incurred by employers to defend the claims. Given the fact your business is more likely to experience an employee lawsuit than a fire, it makes sense to explore coverage for this risk.

What does builders insurance cost?

As you can see, builders insurance is more than just one “product.” It’s often a combination of policies and endorsements, combined together according to your business’ unique needs. Each type of policy comes with its own criteria and rating factors, so the combined cost of your builders insurance premium is a function of many different variables: your annual sales volume, your employee count, your services menu, your experience and loss history, even your online presence (learn more about how your business’ website and social media profiles can affect your builders insurance cost).

Although we like to emphasize the importance of working with an experienced, knowledgeable builders insurance partner, we understand that business owners are sometimes chiefly concerned with cost. We don’t blame you for that. When faced with limited options or incomplete information, it’s no surprise that some builders make a habit of going out to bid every four or five years.

Luckily, C&S Insurance clients don’t have to question the competitiveness of their premiums, nor self-manage the recurring chore of shopping their policies. We’ve eliminated these concerns because our agency has access to ALL the markets that best represent today’s contractors and builders. That’s not hyperbole; it’s a fact.

As trusted advisors and dedicated partners, we make it our responsibility to evaluate and reevaluate your full list of carrier options—at least every three years—on your behalf. Having relationships with dozens of commercial insurance companies helps us stay in tune with market trends, while securing the lowest rates available in the market. Interested in how C&S compares to your current agency? Give us a call: 508-339-2952.