Understanding Contractor Insurance Costs: What You Need to Know 

When you run an auto repair shop, you deal with numerous risks daily—damaged vehicles, accidental injuries, or even lawsuits. Contractor insurance is critical to protecting your business, employees, and customers from significant financial loss. Yet, for many shop owners, one big question looms: how much is contractor insurance? 

This guide will break down everything you need to know about contractor insurance. From understanding types of coverage to factors influencing costs and money-saving tips, we’ll equip you with the knowledge to make informed decisions. Plus, we’ll explain why Toth Felty Insurance is the best choice for your auto repair shop’s needs. 

Types of Contractor Insurance  

Different types of coverage protect against risks specific to auto repair shops. Here are the most essential contractor insurance types you need to understand. 

General Liability Insurance 

General liability insurance is the backbone of business coverage. It protects your shop from claims related to bodily injuries or property damage caused by your services or employees. For example, if a customer trips on a slippery floor and gets hurt at your shop, general liability coverage helps pay for medical bills and legal fees, if necessary. 

Commercial Property Insurance 

Auto repair shops store a significant amount of equipment, tools, and customer vehicles. Commercial property insurance covers damages to your building and contents caused by fire, theft, vandalism, or disasters. Imagine waking up one morning to find your shop has been broken into—this type of insurance ensures you can recover financially. 

Workers’ Compensation Insurance 

If your auto repair shop has employees, most states legally require workers’ compensation coverage. This type of insurance covers medical expenses and lost wages if an employee becomes injured or sick on the job. For instance, a mechanic accidentally injures their hand while working, workers’ compensation ensures they’re taken care of while protecting your business from potential lawsuits. 

Professional Liability Insurance 

Mistakes happen—even in auto repair shops. Professional liability insurance (also known as errors and omissions insurance) kicks in if a customer claims financial loss due to a mistake or oversight in your repair work. For example, if a vehicle’s brakes fail after a faulty service, the customer could file a claim against your shop. 

Commercial Auto Insurance 

Do you use vehicles for work purposes—like picking up parts or towing customer cars? Then you’ll need commercial auto insurance. This covers accidents or damage involving vehicles used for business operations. 

Umbrella Insurance 

An umbrella policy adds an extra layer of liability coverage beyond your standard insurance limits. It’s especially helpful when dealing with expensive lawsuits or claims. 

Factors Affecting Contractor Insurance Costs 

Insurance costs vary based on several factors unique to your business. Understanding these elements can help you anticipate and manage premium expenses better. 

1. Business Size and Revenue 

The larger your auto repair shop, the higher the insurance costs. A shop with multiple employees, larger facilities, and higher revenue translates to more exposure to risks, driving up premiums. 

2. Location 

Where your shop operates plays a big role in determining insurance costs. Locations prone to natural disasters, high theft rates, or other risks may result in higher premiums. 

3. Type of Services Offered 

Not all auto repair services are created equal when it comes to risk. Shops handling high-performance or luxury vehicles might pay higher premiums than general mechanics servicing standard cars. 

4. Claims History 

If your shop has a history of frequent insurance claims, insurers may view you as a higher risk, leading to higher premiums. Maintaining a clean claims record can help you save money. 

5. Coverage Limits and Deductibles 

Opting for higher policy limits will increase costs since you’re asking for more extensive financial protection. On the other hand, raising deductibles (the amount you pay out of pocket before coverage kicks in) can lower your premium. 

6. Employee Count and Payroll 

Businesses with more employees typically pay higher premiums for workers’ compensation since the risk of workplace injuries increases with a larger team. 

7. Customizations 

Adding riders or endorsements to tailor your policy to your shop’s specific needs may slightly increase your overall costs. 

Tips for Saving on Contractor Insurance 

Insurance is essential, but it doesn’t have to break the bank. Here’s how auto repair shop owners can keep their premiums in check. 

1. Bundle Your Policies 

Many insurance providers offer discounts if you bundle multiple coverages, such as general liability, commercial property, or auto and umbrella insurance. 

2. Increase Deductibles 

Choosing a higher deductible can significantly reduce your premium, and how much is contractor insurance. Ensure you have enough savings to cover the deductible if an incident occurs. 

3. Implement Safety Measures 

Installing security cameras, fire alarms, or sprinkler systems can make your shop less risky to insure. Regular employee training on safety protocols can also prevent costly workplace accidents. 

4. Maintain a Clean Claims History 

Avoid filing minor claims if possible—handling small issues yourself can improve your claims record and lower future premiums. 

5. Compare Quotes Regularly 

Insurance rates fluctuate, so shopping around and comparing quotes every year can help you find better deals. Consider working with an independent agency like Toth Felty Insurance, which can compare products across multiple providers to get you the best value. 

6. Customize Coverage Levels 

Assess your shop’s specific needs and reduce unnecessary coverage. For instance, skip commercial auto insurance if you don’t use vehicles for business purposes. 

7. Stay Updated on Industry Changes 

Monitor insurance trends and regulation changes that could affect your coverage costs. Being proactive can save you from paying more later. 

Why Toth Felty Insurance Is the Best Choice 

If you’re ready to protect your auto repair shop with contractor insurance, Toth Felty Insurance Agency is here to help. Here’s what sets us apart. 

• Independent Agency: We’ve been serving businesses since 1971, offering personalized solutions tailored to your specific needs. 
• Wide Range of Products: We work with reputable insurers to provide comprehensive and competitive coverage options. 
• Local Expertise: As a locally owned company, we understand auto repair shops’ unique challenges and provide tailored guidance. 
• Personal Relationships: Our agents are like your “insurance doctors.” We’re just a call away to address your concerns and ensure you’re adequately covered. 
• Customer-Focused: Our commitment to exceptional service has made us America’s #1 Trusted Insurance Agency. 

Visit Toth Felty Insurance or call us at (440) 888-7854 for a free quote. Leave the insurance worries to us so you can focus on what you do best—running your shop. 

Protect Your Business Today 

Contractor insurance is not just a legal or financial requirement; it’s peace of mind that lets you operate your auto repair shop confidently. With the right coverage in place, you can focus on delivering exceptional service to your customers without worrying about unexpected challenges. 

Partner with a trusted agency like Toth Felty Insurance to protect your shop. Get started here (link) and take the first step toward securing your business, team, and future.