There are more than 919,000 construction companies in the U.S., employing over 8 million people, according to the Associated General Contractors of America, a trade organization. Many more work as independent contractors, offering everything from general handyman services to specialized work like cabinetry. These hard-working men and women rely on their vehicles to transport tools, equipment and materials to and from job sites. They also rely on commercial vehicle insurance to protect themselves and their automobiles.
In most every state, construction and contracting businesses that own or lease vehicles must carry commercial liability auto insurance. This type of insurance covers your financial responsibilities if you or one of your employees causes an accident while driving a work vehicle and includes bodily injury and property damage liability.
Construction businesses can supplement that coverage with comprehensive and collision insurance. Comprehensive insurance covers non-collision events, like fire, theft, natural disasters, vandalism, broken glass and animal damage. Collision insurance covers accidents and collisions with another vehicle or object.
On average, a construction and contracting business can expect to pay about $173 per month or $2,075 per year for commercial vehicle insurance, according to Insureon, an agency that specializes in business coverage.
However, what a construction business pays for liability, comprehensive and collision insurance depends on several factors, such as the age of your employees and their driving records, the types of vehicles you own, what those vehicle are used for, the coverage you choose and other criteria, says Kristin Thelen, director of account management for Insureon.
In this guide, we’ll share the average cost of commercial auto insurance for construction and contracting businesses and explain how insurance companies calculate premiums. We’ll also share some tips for saving money on your commercial car insurance policy.
- The average cost of commercial vehicle insurance for contractors and construction business is $2,075 per year, or about $173 per month.
- Commercial vehicle insurance premiums depend on factors such as industry, location, fleet size, claim history, policy limits and deductible.
- Commercial auto insurance is a legal requirement in most states for businesses that own or lease vehicles or trucks.
- Most commercial insurance companies, including Berkshire Hathaway, The Hartford, Old Republic and W.R. Berkley, offer vehicle insurance for contractors and construction businesses.
How much is commercial auto insurance for contractors and construction businesses?
The average cost of commercial vehicle insurance for construction businesses is $2,075 per year, or about $173 per month, according to Insureon. However, the actual amount your business will pay depends on various rating criteria and industry-specific risks, as well as the carrier you select.
For example, while Insureon estimates a monthly premium of $160 for carpenters, Next Insurance quotes an average of $137 monthly. For electricians, Insureon estimates $140, while Next puts that rate at $173.
Below are average monthly commercial vehicle insurance costs for a select group of construction and contracting businesses, based on Insureon estimates:
- Carpenter: $160
- General contractor: $180
- Electricians: $140
- Handyman services: $185
- Painters: $139
- Plumbers: $225
- Roofing: $173
Types of construction businesses that may need commercial auto insurance
Few industries are more dependent on vehicles than construction and contracting. From hauling heavy equipment to transporting employees and their tools to and from job sites, many kinds of construction businesses may need commercial auto insurance coverage, including:
- Carpenters
- Concrete and paving contractors
- Debris removal
- Drain cleaners
- Electricians
- Excavation contractors
- Framing contractors
- General contractors
- Handymen
- Home inspectors
- Locksmiths
- Masonry contractors
- Painters and paperhangers
- Plumbers
- Roofers
- Sheet metal contractors
- Stucco and plastering
- Swimming pool contractors
- Welders
- Woodworking contractors
How are commercial auto insurance rates determined for contractors and construction businesses?
Insurers use different criteria to determine the risk of insuring your construction business. The riskier your business is to insure, the higher your premium will be.
Your location is one of the biggest factors affecting commercial auto premiums for construction businesses. Rates differ by state, city and ZIP code. For example, if your business operates in a state that experiences severe weather, or if you garage your construction vehicles in a neighborhood with high crime, you can expect to pay a higher insurance premium.
Vehicle usage is another thing that determines your business auto insurance cost. If your construction business has a large fleet of vehicles driving long distances to job sites, you can expect to pay more than an independent contractor with two pickups. The types of vehicles you own can also impact your premium.
Other factors include:
- Business type
- Number of vehicles
- Claim history
- Driving records for your workers and yourself
- Endorsements and policy limits
Do policy limits affect commercial auto insurance premiums?
Commercial auto insurance policy limits have a direct effect on premiums. The higher your coverage limit, the more expensive your rate will be. When you’re purchasing commercial auto insurance for your construction or contracting business, it’s important to choose the right amount of coverage.
Nearly every state requires small businesses to carry a minimum amount of commercial auto insurance. Most states require liability insurance, but others have additional requirements, like uninsured/underinsured motorist insurance and personal injury protection (PIP).
If you choose a full coverage policy, your commercial auto insurance will also cover the cost of repairing a business vehicle or replacing one that gets totaled in a covered loss. Full coverage also includes comprehensive insurance, which covers non-collision damage, such as theft, vandalism, hail, falling objects and floods.
While a state minimum coverage policy is the cheapest commercial auto insurance you can legally have, paying a higher premium for a full coverage policy will provide much more financial protection in case of an accident or other covered loss.
Many insurance companies recommend a business coverage of $1 million, according to the Insurance Information Institute (Triple-I), an industry trade group. While you might think a higher limit will add to your costs, Triple-I says it doesn’t add much to the price, especially considering the additional protection it provides.
How contractors and construction businesses can shop for commercial auto insurance
If you’re shopping for commercial auto insurance, it’s a good idea to get multiple quotes for your construction or contracting business. Comparison shopping will help you find the most affordable commercial auto insurance for your industry, fleet size and other factors.
Here are some tips for getting the most accurate commercial auto insurance quotes for construction businesses:
- Pull together driver information. First, gather information for all the drivers you want to insure. This should include anyone who drives work vehicles on a regular basis. You’ll need the drivers’ names, addresses and driver’s license numbers when you get a quote.
- Determine what coverages you need. Decide what commercial auto insurance coverages you need. Many experts recommend a full coverage policy with collision and comprehensive insurance. You might also want to consider endorsements, like roadside assistance and rental car coverage. You’ll pay extra for these coverages, but they fill gaps in your standard policy.
- Select a policy limit. You might need higher coverage limits if you drive business vehicles long distances, or drive in congested areas, where an accident might be more likely.
- Choose a deductible. There’s deductibles with comprehensive and collision coverage. Picking a higher deductible will result in a lower monthly rate, while a lower deductible will have a higher premium. Choose a deductible that you can comfortably afford in case of a claim.
How a construction business can save on commercial auto insurance
Commercial auto insurance premiums are different for every construction service. Premiums can vary depending on your location, fleet size, employee driving records, claim history and other factors. However, there are ways to save on business vehicle insurance.
Here are some ways that you can reduce your commercial auto insurance costs:
- Seek out discounts. Many insurance companies offer discounts – such as bundling, and pay-in-full discounts – that can lower contracting and construction business auto premiums. Ask an agent what you might be eligible for.
- Bundle. You can usually save money on commercial auto insurance by bundling your policy with another product, like general liability insurance or commercial property insurance.
- Pay upfront. Most insurers will give you a discount on commercial car insurance if you pay your annual premium upfront and in full, rather than in monthly installments.
- Sign up for a telematics program. These programs track driving behaviors and trip patterns. If your employees drive safely, you could get a discounted premium.
- Up your deductible. Raising your deductible will lower your monthly premium. However, choose a deductible you can afford in the event of a claim.
- Comparison shop. Experts recommend getting at least three quotes before purchasing a policy. Comparison shopping makes it easy to see which insurer offers the lowest rate for the coverage you want.
What insurance companies offer commercial auto insurance for construction?
Most commercial insurance companies sell vehicle insurance for construction businesses. Here are some companies you might consider if you’re shopping for this type of insurance:
- Berkshire Hathaway
- The Hartford
- Old Republic
- W.R. Berkley
Insurance.com, which is owned by the same company that operates CarInsurance.com, has a list of the top 10 commercial auto insurers.
Sources
Insurance Information Institute. “Business Vehicle Insurance” Accessed June 2025.
Frequently asked questions
Does your industry affect the cost of commercial auto insurance?
Yes. In general, businesses in high-risk industries, like trucking and construction, pay higher premiums than lower-risk industries, such as professional services. However, other factors also affect your premium, like your location, fleet size, vehicle types and policy limits.
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