Auto Insurance for Large Construction Businesses: How to Choose the Right Commercial Policy
A large construction company is defined by the number of employees, the size of the fleet, and the scope and size of the jobs the company bids on. When these large companies invest in policies like commercial auto insurance, they protect their business-owned or leased road-use vehicles from accidents and damage.
Read on to discover what you need to know about insuring your commercial fleets as a large construction company.
What Does a Commercial Auto Insurance Policy Cover?
Most commercial auto policies provide property coverage (which protects against damage to your vehicle) and liability coverage (which protects against bodily injury to others and damage to their property).
What Factors Determine The Cost of Commercial Auto Insurance?
In general, the cost of commercial auto insurance policies is determined by factors like class of business (NAICS code), territory, business use, radius of operations, size, age, liability limit, and new cost of each vehicle.
When it comes to commercial auto insurance for construction businesses, some of the additional factors an underwriter might consider when determining rate include:
- Number of vehicles owned or leased
- The kind/size of vehicles you’re driving
- The typical distance they’re traveling – is it within a 50-75 mile radius?
- What’s being stored or transported in the vehicles
- Is driver training provided for your fleet?
For example, Mitch Gearhart, Transportation Underwriting Specialist at Central Insurance explains that “if you have a truck that’s 10,000 – 20,000 in gross vehicle weight, that will be a medium weighted class. It’s marked at a little higher rate because it’s a bigger truck that can cause a little more damage in the event of an accident. On the other hand, a semi-tractor or box truck would be an extra heavy tractor-trailer class, and we’d look at factors like distance when determining price. We want to verify how far those are going and the chances of it tipping while hauling something overweight. The larger the class of vehicle, the more your rate will increase.”
Managing Your Commercial Auto Policy as a Large Construction Company
Whether you want to ensure you have the best construction insurance policy in place for your organization or your company has grown in recent years to include a fleet of vehicles, here are three tips for insuring your fleet that Central’s transportation experts want you to know.
#1: Check Your Certificates of Insurance
There are certain requirements that construction companies must meet for their commercial vehicles to enter job sites. The right insurance carrier will understand how important these contract requirements are and will be able to work with you on each unique certificate of insurance. Knowing that some jobs require more limits than others, they can underwrite to the specifics of the contract to ensure you’re appropriately covered.
#2: Consider Sophisticated Deductible Programs
Large construction companies can receive deductible credit by having a stake in their safety management. Larger companies can typically afford a larger deductible, and if you reduce the number of claims by focusing on safety, you’ll see the benefit in your bottom line.
“You can receive credits and debits on your account based on the risk assessment of your business, loss runs, and experience,” says Jason McConkey, Director of Transportation Underwriting at Central Insurance.
Other steps he recommends to reduce rates include investing in your fleet, conducting maintenance check-ups, conducting daily walk-throughs of the vehicles and storage spaces, and making sure MVRs are run annually on even experienced drivers.
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#3: Fleet Safety Should be Important as Job Site Safety
Fleet safety procedures benefit large construction companies from a loss control perspective. Telematics in vehicles that track driving behavior, like dash cams, provide opportunities for enhanced driver training.
Managing your commercial vehicles is so crucial that Central experts recommend companies with over 20-30 vehicles hire a fleet safety compliance manager who can oversee telematics management and driver and vehicle safety.
#4: Your Drivers Play a Big Part in Your Commercial Auto Rates
Large construction companies can see significant benefits from implementing strict hiring procedures for employee drivers. Alongside typical background and motor vehicle record (MVR) checks, there are additional steps you can take to protect your vehicle and keep your commercial auto insurance rates low.
Start by evaluating your current hiring and screening practices and then consider implementing new-hire drug testing, post-accident drug testing, a post-accident reporting procedure, or even driver incentive programs for those who remain accident-free.
Learn More: Employee Drivers & Your Business Auto Insurance Rates
If you currently don’t have a hiring loss control program in place, an experienced insurance company like Central Insurance can help you implement these protocols. If you do have a loss incident, Central goes above and beyond to help you manage that process quickly so you can minimize project disruptions.
In addition, Central insureds benefit from a dedicated loss control consultant who acts as a guide to all things safety. They can provide templates and best practices to help set up a fleet safety program, conduct driver safety meetings, and provide recommendations for telematics providers—whatever a specific construction company needs to get them operating safely.
The Value of a Construction Underwriting Specialist
Central is dedicated to providing our policyholders with easy access to the Central team members who can help them best manage their fleets.
For example, Matt Sbordone, Central’s Construction Underwriting Specialist, is a resource for construction clients looking to better understand what their exposures are and what determines their rates. Sbordone will visit a company on-site, provide an evaluation and feedback, and walk each policyholder through how they can improve safety.
“We know about the unique exposures that contractors face, and then we can provide solutions to help alleviate risk; that’s what we’re here for,” Sbordone says. “Our dedicated Construction team seeks to demonstrate our expertise and earn the trust of our policyholders because, in the end, they look to us to be the experts, and they want the knowledge, experience, and resources we can bring to them.”
“Relationships are the foundation of everything we do, and it’s a true differentiator over other insurance companies.”
– Matt Sbordone, Construction Underwriting Specialist at Central Insurance
Work with a Trusted Expert in Construction Insurance
Whether you’re a Central insured looking to maximize your relationship or a potential policyholder considering working with us, we invite you to learn more about our commercial auto insurance coverage or start a conversation with your local Central agent. Our hand-picked agent partners are equipped to provide you with all the insight you need to ensure you have the right policy for your large construction company.
