Epoxy flooring business insurance: what you need and what it costs

An epoxy flooring business needs general liability insurance before the first job, commercial auto for the work vehicle, coverage for its tools, and workers’ compensation once it has employees. For a small flooring installer, general liability typically runs about $77 a month ($919 a year) for $1 million per occurrence and $2 million aggregate limits, workers’ comp about $144 a month, and commercial auto about $208 a month.

Below: each policy, what it covers, what it typically costs, and the certificates, endorsements and bonds customers ask about.

The policies at a glance

These medians are for small flooring installation businesses: most with fewer than five employees, revenue from about $50,000 to more than $200,000, and five years or less in business.

General liability

General liability is the policy customers, landlords and licensing boards ask about first. It covers basic third-party risks, such as accidentally damaging a client’s belongings during an install. On a coating job, think of a customer tripping over a hose, overspray on a car, or a grinder damaging a door frame.

What it usually doesn’t cover is the cost of redoing your own defective floor. That’s what your warranty reserve and, in some cases, professional liability are for. Ask your agent how the policy treats faulty workmanship and damage from your completed work.

Workers’ compensation

Most states require workers’ comp for flooring businesses with employees. The rules aren’t uniform: in Texas, for example, private employers can choose whether to carry workers’ compensation, and employers who don’t carry it have reporting duties.

Check your state on the license requirements page and with your state’s workers’ compensation agency before you hire. If you’re about to bring on help, hiring epoxy floor installers covers classification and payroll costs.

Commercial auto

Commercial auto protects you when an accident involves your company’s vehicle; the typical median is $208 a month. If you use a personal truck to haul a grinder, an extractor and coatings, ask your agent whether your personal policy excludes business use, and mention any trailer you tow.

Tools and equipment

A new dual-disc grinder costs about $8,500 and a mid-size HEPA dust extractor about $3,400–3,900, so losing them to theft or damage can stop the business. Tools and equipment (inland marine) coverage helps pay for repair or replacement; the typical median is $41 a month. Ask whether rented equipment is covered, or whether you need the rental company’s damage waiver.

Business owner’s policy and umbrella

A BOP is a cost-effective way to buy general liability and commercial property coverage together. It’s worth a look once you have a shop, stored materials or office equipment to protect. A commercial umbrella adds limits above your general liability, commercial auto and employer’s liability once those limits are reached; check what limits your commercial customers require before you bid.

Contractor’s pollution liability

Coating work involves solvents and chemicals, and general liability policies typically exclude pollution, though coverage can sometimes be added by endorsement. Contractor’s pollution liability covers third-party injury, property damage and legal defense from pollution incidents caused by your work, such as a solvent spill. Ask your agent whether your general liability policy has a pollution exclusion and whether any commercial contracts you bid require pollution coverage.

Certificates of insurance and additional-insured requests

Builders, property managers and commercial customers will ask for a certificate of insurance before you start. It’s your official proof of coverage, usually on an ACORD 25 form, showing the insurer, coverage types, policy numbers, limits and dates. It’s not the policy itself, so handing one over doesn’t change your coverage.

Customers may also ask to be named as an additional insured, which extends your general liability coverage to them for claims connected to your work. Your insurer adds it by endorsement, which may raise your premium; an additional insured can’t be added to a professional liability policy. Ask for every request in writing and send it to your agent before the job.

Bonds are not insurance

A surety bond and an insurance policy work in opposite directions. Insurance protects you; a bond protects the obligee, such as a state licensing agency or a customer. If a valid claim is paid on your bond, you have to pay the surety back. Some states require a contractor license bond to get or keep a license; bonds for small flooring installers typically cost about $9 a month.

What a first-year insurance budget looks like

At typical annual medians:

These are medians, not quotes. Your premium depends on your state, revenue, payroll, vehicles, claims history and the work you do (residential garages versus commercial floors). Add your figures to the startup cost calculator and to your overhead in how to price epoxy flooring.

Insurance belongs in every price

Premiums are overhead, so every job has to carry its share. A solo owner paying $3,904 a year who installs 36 floors needs $3,904 ÷ 36 = $108.44 per job just for insurance; at 80 jobs, the same premiums cost $48.80 per job. Fewer jobs means each one carries more, which is one more reason a new business needs a minimum job price.

Questions to ask your agent

• Does my general liability policy exclude any part of floor-coating work, or pollution?
• How does it treat damage caused by my completed work, and faulty workmanship?
• Are my grinder, extractor and rented equipment covered on job sites and in the trailer?
• What does my state require for workers’ comp, and when?
• Can you issue certificates and additional-insured endorsements quickly, and at what cost?
• What limits do my likely commercial customers or advertising platforms require? (Google’s Local Services Ads, for example, require general and professional liability for the flooring category.)