Having the right insurance policies isn’t just smart—it’s survival.
Construction is risky business, and one unexpected accident could leave your finances as demolished as the wall you accidentally knocked over.
But here’s the good news: Protecting your business with insurance doesn’t mean you have to overpay.
In fact, you can save big by tweaking your policies—starting with your deductibles.
Before you crank up your deductibles to save on monthly premiums, let’s pause for a toolbox talk.
You need the right info to make the best choice for your business.
But first, let’s review the basics:
Your deductible is the cash you’ll fork over before your insurance steps in to save the day.
Example time:
Your general liability policy has a $500 deductible.
You accidentally cause $2,000 in property damage to a neighbor’s lawn (oops).
You pay $500; your insurance covers the remaining $1,500.
Simple enough, right?
Your premium is what you pay to have insurance in the first place.
You can pay monthly or yearly, and the price depends on factors like your policy type, coverage limits, and—you guessed it—your deductible.
Higher deductible = lower premium.
Back to our example:
Raise your deductible to $1,000. Save on monthly premiums.
But now, if you damage that same $2,000 lawn, you pay $1,000, and your insurer covers the other $1,000.
Great for your budget until something goes wrong.
Saving on premiums feels great—until you’re hit with a deductible you can’t afford.
Let’s play out the worst-case scenario:
A fire breaks out on a project site, torching your materials, supplies, and weeks of progress.
Could you comfortably pay your deductible to get back on track?
For many contractors, the answer is a resounding “no.”
Here’s the deal: Insurance is supposed to be your safety net, not a financial high-wire act.
If your deductible is so high that you can’t afford it, you’re putting your business at risk.
And in construction, where disasters can strike faster than you can say “change order,” that’s a gamble you don’t want to take.
Now, let’s talk about when it does make sense to go high-deductible.
The golden rule: Only raise your deductible if you’ve got an emergency fund to cover it.
Say your policy’s highest deductible is $5,000. If you’ve got $5,000 set aside in your business savings account, you’re golden.
If not, keep that deductible low enough to manage.
Higher deductibles can save you money on your premiums, freeing up cash for:
🚜 New equipment (hello, shiny new excavator).
💼 Business growth (more jobs, more profits).
💸 Improved cash flow (fewer financial headaches).
The best move?
Use that extra cash to grow your emergency fund so you’re always ready to cover your deductible, no matter what.
The right deductible for your business isn’t one-size-fits-all.
It’s the amount you can confidently pay if things go sideways.
Raise your deductibles strategically—when you’re financially ready—and you’ll enjoy lower premiums without sweating the unexpected.
In the meantime, remember: a well-protected business is a thriving business.