How Much Does Insurance Cost For Excavation Contractors? 2025 Rates

U.S. excavation businesses can expect to pay between $1,440 and $3,000 annually for business insurance, averaging $120 to $250 per month. The primary cost drivers are location, type of excavation work, project size and duration, experience and safety record, number of workers on site, and equipment used.

How Much Does Excavation Insurance Cost?

The average excavation business in the U.S. pays between $1,440 and $3,000 per year for business insurance. That breaks down to roughly $120 to $250 per month. However, this is just an average range and actual business insurance costs can vary widely depending on your specific situation.

Excavation insurance can protect you from costly accidents, property damage, and injuries that can happen on the job. The price can vary depending on the type of excavation work you do, your company size, and project location. 

Here are some of the biggest cost drivers:

• Number of employees (affects workers’ comp and liability)
• Type of excavation work (affects overall risk)
• Property size and value (affects commercial property coverage)
• Past claims history (insurers charge more if you’ve filed claims)
• Business interruption coverage and other add-ons

Knowing these factors can help you figure out what kind of insurance you need and plan for the actual cost of protecting your business. 

Average Excavation Insurance Costs For Coverage Types

Excavation projects can come with risks. Having the right coverage is important to protect business and finances from potential losses. It’s important to understand that different policies cover different risks when it comes to protecting your excavation business. 

Here’s a closer look at the major coverages most excavation businesses need.

• General liability insurance: $120 per month
• Business owner’s policy: $95 per month
• Workers’ compensation insurance: $389 per month
• Commercial auto insurance: $211 per month
• Contractor’s tools and equipment: $49 per month
• Professional liability insurance: $79 per month

General Liability Insurance

The average cost of general liability insurance for an excavation business is about $120 per month.

General liability insurance helps protect an excavation business from accidents and damages that can happen on the job. For example, if someone walking near your job site trips over equipment and gets injured, this insurance can help pay for their medical bills and your legal costs if they sue.

The general liability costs for an excavation business can be impacted by several factors, including project risks, business size & revenue, location, coverage limits, number of employees, and claims history. 

You can expect policy limits to be $1 million per occurrence and $2 million aggregate.

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates are based on typical national averages for excavation contractors for general liability coverage. Figures reflect regional adjustments for business risk, project scope, and underwriting practices. Actual premiums will vary depending on factors such as company size, payroll, claims history, and location-specific risks.

Business Owner’s Policy (BOP)

The average cost of a business owner’s policy (BOP) is about $95 per month for an excavation business.

A business owners policy is a type of insurance package that combines several important coverages into one plan. For excavation contractors, it proved essential protection against common risks, such as job site accidents and equipment loss. 

For example, if a fire or theft damages your office or machines, a BOP can help pay for repairs or replacements.

Policy limits: $1 million per occurrence and $2 million aggregate.

BOP costs vary depending on several factors, including the value of your property and equipment, size and revenue, location and risk level, type of excavation work, and claims history. 

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates are based on industry averages for excavation contractors purchasing a Business Owner’s Policy (BOP), which typically bundles general liability and property coverage. Costs vary depending on factors such as business size, location, number of employees, equipment used, and safety record. Actual premiums will vary depending on your specific business profile and insurer underwriting.

Workers’ Compensation Insurance

The average cost of workers’ compensation insurance for an excavation business is around $389 per month.

Workers compensation helps protect both your employees and your business when a worker gets sick or hurt because of their job. 

For example, if a worker gets injured while digging a trench, workers’ comp would help pay for their doctor visits and part of their lost income while they recover.

Each state sets its own rules for policy limits, but they usually cover medical bills and part of lost wages, with no fixed maximum amount.

The main factors that impact the cost of workers compensation insurance include location, payroll size, the kind of work employees do, and number of employees. 

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates are based on industry averages for excavation contractors with moderate risk profiles, typical payroll sizes, and standard coverage limits. Actual premiums will vary depending on your business’s location, number of employees, experience modification rate (EMR), safety record, and classification codes

Commercial Auto Insurance

The average cost of commercial auto insurance for an excavation business is about $211 per month.

Commercial auto insurance protects your business vehicles and drivers when they’re used for work. For example, if one of your dump trucks is involved in an accident on the way to a job site, this insurance can help cover the repair costs and any third-party claims.

The cost of commercial auto insurance is impacted by several factors such as, value of vehicle, past claims, and your coverage needs.

If your business uses commercial, rented or leased vehicles for work, you should get hired and non-owned auto insurance (HNOA). Find out how commercial auto insurance costs are calculated and how you can save money on your insurance.

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates are based on typical commercial auto insurance rates for excavation contractors, factoring in vehicle type, coverage limits, business location, and industry risk profile. Actual premiums will vary depending on your fleet size, driving history, coverage needs, and insurer.

Contractor’s Tools And Equipment

The average cost of contractor’s tools and equipment for an excavation business is about $49 per month.

Contractor tools and equipment insurance helps protect the tools and machines your excavation business uses everyday. 

For example, if someone steals a trailer of tools from a job site overnight, or if a skid steer is damaged during transport, this insurance can help pay to repair or replace the equipment.

You might need extra coverage for heavy machinery or other costly equipment used at construction sites. 

Contractor’s tools and equipment coverage cost is impacted by several factors, such as the type of work you do, the age and condition of your machinery, and the value of your tools and equipment. 

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates are based on national averages for small excavation businesses with standard coverage limits and typical equipment values. Actual premiums will vary depending on factors such as business size, location, equipment type and value, safety record, and insurer underwriting criteria.

Professional Liability Insurance

The average cost of professional liability insurance for an excavation business is about $79 per month.

For an excavation business, this type of insurance will help with claims related to mistakes or negligence in the work you provide. It’s more common in fields like engineering or consulting, but it can still be important for excavation contractors who offer design advice, site planning, or project management.

For example, if your excavation plans result in improper grading that later causes drainage problems or foundation issues for a building, the client may sue you for damages. This insurance would help cover your defense costs and any payout, up to your policy limits.

The insurance cost depends on things like how big your business is, or how much coverage you need. 

Policy limits: $1 million per occurrence; $1 million aggregate.

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates are based on average monthly premiums for professional liability coverage in 2025, adjusted for regional factors such as business size, risk exposure, and local insurance market conditions. Actual premiums will vary depending on your business’s location, scope of work, claims history, and coverage limits.

Excavation Business Insurance Costs By Provider

Excavation business insurance costs will vary greatly depending on the insurance carrier. Use the table below to find average costs across different providers.

Note: These estimates are based on market data for excavation contractors with moderate risk profiles, typical coverage limits, and standard liability policies. Actual premiums will vary depending on your location, business size, number of employees, safety record, and specific coverage needs.

What Factors Impact Your Excavation Insurance Costs?

There are several factors that impact your excavation insurance cost. Understanding these factors is important because it helps you find fair rates, and choose a coverage that meets your business requirements. Here’s what to look out for: 

Services Offered

 Excavation projects that involve heavy machinery or deep digging usually cost more to insure because they have a high risk of property damage or injuries. Low risk and smaller projects tend to have cheaper insurance rates. 

Coverage Type

Excavation and grading contractors often need certain insurance policies before starting a job. These required policies help cover major lawsuits or accidents, which can be more expensive than basic coverage. 

Location Of The Project

The location of your project can make a big difference in how much you pay for excavation insurance. If your project is in a crowded or busy area, insurance may cost more because there’s a high chance of damaging buildings nearby, or underground utilities. In short, the more risk connected to your project’s location, the more your insurance cost will likely be.

Equipment & Assets Used

Expensive items usually make your insurance cost more than cheaper ones. Tools or equipment that you use often also tend to raise your insurance rates compared to items you use less.

Project Size & Duration

Bigger or longer projects will usually carry more risks. A big project will involve more workers. A big project may involve more equipment, workers, and materials, which increases the chance of accidents. Similarly, a long-lasting project also keeps your business exposed to risk for longer. These projects often mean higher costs. 

Number Of Workers On Site

The more workers you have on a job site, the higher the risk of accidents. Insurance companies see more employees as greater chances for damage or injury, increasing the cost. 

How To Lower Your Excavation Insurance Costs

Lowering your excavation business insurance cost can be a tricky thing to do, it requires strategic thinking and smart business practice. 

Here are some practical ways to lower your excavation business insurance costs: 

1. Compare Rates

 Insurance prices for excavation business can vary a lot, even for the same coverage. It’s wise to get quotes from three to four companies and compare them to get the best rates. Additionally, you can also find an independent agent to compare the quotes for you. 

2. Policy Bundles

It’s no secret that most insurance companies offer discounts if you bundle policies. Buying commercial property, general liability, and commercial auto insurance from the same company usually costs less than buying them from different ones. 

3. Choosing The Right Coverage

Understanding what kind of coverage your excavation business needs helps you avoid paying for coverage you don’t use. We suggest getting general liability insurance, business owner’s policy, workers’ compensation insurance, commercial auto insurance, contractor’s tools and equipment, and professional liability insurance to give your business full protection. 

4. Make Annual Adjustments To Your Coverage

Don’t just buy insurance and forget about it once you get good rates. As you hire more workers or grow your services, you’ll find changes in your insurance needs. It is a good idea to review your insurance needs every year and remove coverage you don’t need. 

5. Adjust Your Deductible

Choosing a higher deductible can lower your monthly insurance premiums because you agree to pay more yourself before insurance coverage kicks in.