Startup culture and entrepreneurship are at a fever pitch in New York, but when it comes to Construction startups the battle is tougher.
Gathering the necessary funds to open a construction business is not an easy feat. Most owners self fund since the VC’s of the world don’t find construction scale-able like an app.
Don’t let the lack of funding hold you back, starting up a general construction business while a challenge can be highly rewarding.
IF you are starting up a General Contracting business there are probably a thousand things you have to think about and consider.
Something you have to consider early in your process is General Contractors Insurance.
Proper budgeting for insurance, will determine if you make or loose money on your first few jobs.
The needs of a startup General Contractors are different than the needs of an established General contracting firm.
There are 3 critical keys to startup general contractors insurance.
One of the keys is a low minimum premium.
For those of you that do not know, most commercial insurance policies have minimum premiums. In short this is the lowest possible price for the insurance company to charge for an insurance policy.
In New York, the minimum premiums for good coverage can be budget busting. So working with an insurance company with a low minimum premium is very important. Not many startups can afford a minimum premium of $150,000.
The second critical key to startup general contractors insurance is Coverage.
Coverage is loosely what inclusion and exclusions apply to the policy. With most insurance policies ranging from 50 to 250 pages the number of exclusions that can be thrown in without your knowledge is staggering. Careful review of policy forms will help you know your limitations before a claim occurs.
The third and final critical key for startup general contractors is a knowledgeable broker that provides timely service.
In New York and Connecticut their are probably over 1,000 Insurance brokers and roughly 90% of them advertise in some capacity that they provide insurance to contractors.
However in my experience only a much smaller percentage of brokers actually have the knowledge, markets and skills to provide the coverage and service you need.
This is especially true as as startup, where your needs are actually greater than that of an experience general contracting firm.
Guiding startups through the process of becoming a licensed New York or Connecticut contractor depends on strong insurance brokers.
Without further delay, lets get into the best startup general contractors insurance companies for New York and Connecticut.
For New York based general contractors the options are pretty limited for those offering good coverage and a low minimum premium.
For the majority of New York based general contractors RLI Corp is the best option.
RLI is a publicly traded company NYSE: RLI The company was founded in 1965 and is rated A+ by the insurance company rating board AM Best. This means they are financially sound and will be around when it comes time to pay a claim.
RLI offers General Contractors Liability policies with minimum premiums starting at $35,000. At that price point, aside from a strict hammer clause, the coverage forms are broad and comprehensive suited for startup general contractors.
With any insurance company, individual underwriting is required to see if you qualify for a quote. RLI has a dedicated team of construction underwriters so the qualification process typically takes less than 24 hours.
Bottom line:
RLI offers a good value, and good coverage for startup general contractors operating in the entire state of New York.
Moving onto Connecticut, startup general contractors have a lot more options than in New York.
But just because their are options does not mean they are all created equal.
IF you are crossing state lines into New York you need to be very careful what exclusions are on your policy. Most policies for CT EXCLUDE work in New York State, unless you specifically request NY coverage.
For the majority of startup General Contractors staying in the state of Connecticut, the best insurance company is Selective Insurance.
Selective is a great publicly traded company NASDAQ: SIGI Founded in 1928 Selective is a stable solution A rated by AM Best. This longevity and financial stability is great for your business in the event of a claim.
Selective has great low minimum premiums for general contractors liability starting at just $1,500 in Connecticut. Selective offers broad coverage at this low price point. This is a great value combination for Startups.
Bottom line:
Getting the right insurance for your Connecticut general contracting firm is a pretty quick process, but should not be taken lightly.
If you are interested in starting the conversation and moving forward with contractors insurance for your startup general construction firm schedule a call below.
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