Real Ways Startup Contractors Can Actually Save on Insurance
Why Most “Savings Tips” Are Useless for New Contractors
Starting your contracting business? Every dollar counts. But the usual advice — “bundle policies,” “raise deductibles,” “shop every year” — doesn’t help when you're brand new. Insurance companies already see you as high-risk, and one wrong move can lock you into bad pricing for years.
Here’s what actually works — from someone who’s helped hundreds of startups do it the smart way.
1. Stability Beats Loyalty (or Shopping Blind)
Myth: “Shop around every year.”
Truth: Bouncing between companies in your first 2 years actually makes you look less stable. But staying forever with one company out of loyalty can hurt too.
What works: Stick with one company for a couple of years — if they specialize in startups and your record is clean. Then re-shop with leverage.
2. Right Company > Right Price
Not all insurers treat new contractors the same. Some make you pay in full, charge extra for tools, or reject claims over minor details. Others want your business and will price it fairly — but only the right agent knows who they are.
Tip: Ask your agent: “Which companies are actually good for new contractors like me?”
3. Strong Limits Open Bigger Doors
Myth: “Lower limits = lower cost.”
Reality: Weak coverage shuts you out of jobs and makes future insurers wary. If you start with $300K or bare-minimum limits, you’ll stay stuck in that tier.
What works: Carry at least $1M liability to signal you’re serious — and open access to better markets later.
4. Don’t Let the Audit Wreck You
The trap: You get a quote that looks cheap… because your agent underreports your payroll or skips subcontractors. Then comes audit time, and BOOM — surprise bill for thousands.
Worst case? You can’t pay, get canceled, and no one else will insure you.
What works:
Track payroll and receipts cleanly
Collect COIs from every subcontractor
Don’t ignore audit emails
Hire a bookkeeper early
5. Small Claims = Big Problems Later
Filing for a stolen drill, a cracked windshield, or a dinged bumper may seem harmless, but those small claims stack up and kill your record. Fastest way to ruin your future pricing? File for every little thing.
What works:
Pay out of pocket for small stuff. Save your insurance for lawsuits, injuries, and major losses.
6. Bundling Isn’t Always Cheaper
Bundling can save money — but not always. Sometimes splitting policies (GL here, tools or auto there) gives you the best pricing.
What works: Have your agent compare bundled vs. split. Don’t assume one-size-fits-all.
7. Not All Insurance Companies Are Equal
Two quotes at $2,500? One may come with fast certs and clean audits. The other? Delays, denials, and stress.
Tip: Ask your agent:
“If the price is the same, which company would you pick — and why?”
Quick Win: Ask These 5 Questions Today
Copy/paste these into a message to your agent:
Which companies really want startups like mine?
What limit do I need today to get better pricing later?
How do I keep audit season from blowing up on me?
How do you help me handle subs and jobsite certs?
If two companies are priced the same, which one treats startups better — and why?
Why I Care
After 25 years in the trenches with contractors, I’ve seen startups crushed by bad advice and overpriced policies. One wrong setup in year one can haunt your pricing — and your business — for years.
That’s why I go deep to find the right companies and teach startup contractors how to build a strong foundation.
Bottom line: The smartest savings don’t come from shortcuts — they come from starting smart.
