aerial photo of construction vehicles

A lot of risks occur on excavation construction sites. Every excavation contractor must have insurance coverage to prevent significant financial loss due to accidents. 

Landslides, mudslides, being trapped under heavy equipment, property damage due to equipment operator error, hitting underground utilities, bodily injury, strains, equipment theft, etc., are all possible risks on an excavation construction site. 

These risks come with substantial financial implications ranging from costly medical expenses to legal fees for lawsuits, lost wages, repair costs, etc. All these may lead the excavation business into bankruptcy. However, with the right insurance coverage, an excavation contractor can get financial protection to mitigate possible financial loss if any of these risks occur. We review some of the needed excavation contractor insurance every excavation contract must carry and how to get the best deal at a low price. 

What is Excavation Contractors Insurance

It refers to any insurance policy that applies to the excavation business. The business insurance coverage that excavation contractors need is similar to the general insurance coverage for construction contractors. It usually includes general liability insurance, commercial auto insurance, workers’ comp, and professional liability, amongst others. The right contractor’s insurance protects your excavation business income and personal finances against liability claims. Having the necessary policies provide coverage for potential risks and cover costs of any risks resulting from your excavation work.

Importance of Carrying Excavation Business Insurance 

A good business insurance policy is vital to small business owners and large-scale contractors. Apart from the essential coverages and all-round protection from financial losses, here are other reasons for carrying proper business insurance:

  • To Start a Project — Some clients and states make it mandatory for commercial grading contractors and small-scale excavation contractors to carry out specific policies before working on a project. The most requested policies are usually the general liability insurance and workers’ comp insurance for hiring businesses. Some clients add contractors as additional insured to their business owners policy, protecting them from any third-party property damage or injury claim.  
  • To Hire Employees — Most states demand that small businesses looking to expand by hiring employees must have workers’ comp to protect them from lost wages due to workplace injury and ensure their medical bills are sorted if a job site accident occurs. 

The vital reason for carrying any applicable business liability insurance is to mitigate the effects of any liability risks on your business’s financial assets.

What Kind of Insurance do You Need for an Excavator?

An excavator is one of the vital pieces of equipment used on an excavation site. An operator’s error may cause an excavator to cause property damage or third-party bodily injury. Furthermore, theft of such big equipment is also possible, which leaves a substantial financial burden on uninsured businesses. 

As a business owner with an excavator, you need a policy that offers property and equipment coverage. Since the excavator is mobile and regarded as a vehicle, you can also purchase coverage for auto insurance.

Here are needed policies for an Excavator:

Commercial Property Insurance 

Commercial property policy provides coverage for rented or owned business property, equipment, and inventory within the premises of the covered building. It helps excavation contractors pay for damaged inventory and equipment, lost income, and operating expenses.

Inland Marine Insurance

Inland marine coverage protects your tools, machines, and equipment irrespective of where they are (within your business premises or at the job site). You can use this policy to protect your excavator from damage or theft while on the job site, even if you are a small business without owned or rented property. 

Commercial Auto Insurance

An excavation contractor that drives his excavator for business needs this insurance policy for protection against possible risks. It covers medical treatment costs, repairs, rental reimbursement, etc., caused by the driver of your commercial vehicles.

Workers’ Compensation Insurance

The workers’ compensation policy is to protect employees after a workplace injury. The hired excavator driver might suffer an injury while operating the machine, which might require medical payments and fees to cover lost wages due to the injury. This policy cover medical bills and other associated expenses.

General Insurance Required for Construction Projects

Business insurance is essential in the construction industry. Clients are more confident in working with businesses with the right commercial insurance policies to cover medical expenses, legal fees, and damages and protect them from lawsuits. 

Many business owners purchase BOP, a bundle of needed policies, including general liability insurance, business interruption, error and omissions insurance, etc. To buy policies for business purposes, construction and excavation companies must consider their business risk level and the coverage they need most.

Here are some of the coverages we think can offer protection for any job site accident while on a construction project:

General Liability Insurance

General liability insurance offers businesses general liability coverage. It protects you and your business from third-party claims resulting from third-party injury or property damage while on a job. General liability covers medical costs, legal fees for lawsuits, cost of damage repair, claims on completed operations, rehabilitation costs, other medical expenses, etc. It’s an essential policy construction contractors must carry due to the high risk involved with construction projects. 

Error & Omissions Insurance

This policy is a defense against claims that your business causes a client to lose money due to professional mistakes or negligence. It takes care of legal defense costs and personal and advertising injury claims. 

Surety Bonds

It helps the client ensure that you don’t go against the agreement in a project contract. It’s an agreement between you, an insurance company, and your client. The insurer pays your client the agreed amount once you fail to meet the deeds of your contract with such a client. 

Advantages of Getting an Independent Insurance Agent

A reliable insurance agent can help you get the best deal for listed excavation business insurance policies. They can compare the excavation insurance cost from multiple insurers in just a few minutes, giving you the best ranges for each premium. Insurance policy for small excavation contractors ranges from a few hundred dollars to thousands of dollars. But you may not need to pay such high premiums if you work with a reputable insurance agency. 


How do you insure an excavator?

The process of ensuring your equipment is straightforward. It involves reviewing your risks, setting a deductible, getting a quote online, comparing rates, understanding the policy you want, and buying enough coverage. Working with an agent can help you get through these processes seamlessly, providing valuable professional guidance. 

What are the requirements for getting Insurance quotes online?

Getting a quote from any company should take just a few minutes. It’s usually free of cost, and you must provide basic business information, such as location, the scope of work, number of employees, how many business vehicles are owned, etc.


Every service in the construction niche needs proper insurance coverage. Working with the right agent can help you choose what’s best for your business at the right premium. It’s never too late to protect you and your business.