The 238,000 excavation businesses in the U.S. have faced a dynamic environment in recent years, influenced by shifts in the housing market and higher interest rates impacting funding for new projects.

These economic pressures add to the already high-risk nature of the job, where safety concerns and potential liabilities are an everyday concern. As an excavation contractor, you know the significant risks associated with working in what OSHA considers one of the most hazardous construction operations. The potential for financial loss is high, from heavy machinery accidents to property damage. That’s why having the right insurance coverage is critical.

Keep reading to uncover the five excavation contractor insurance policies you need to protect your business, employees, and clients, with expert guidance from Thomas McMillan, commercial lines staff underwriter at Central Insurance.

What are the five policies you need as an excavation contractor?

1. General Liability Insurance Provides Essential Protection for Excavation Contractors

General liability insurance is the cornerstone of any excavation contractor’s insurance portfolio. It protects against third-party claims for bodily injury and property damage. This coverage is vital because excavation contractors often work on third-party properties, creating possible risks for property damage and liability for injuries to other parties on-site, such as utility workers, surveyors, or the general contractor.

2. Specialized Equipment Like Excavators Calls for Commercial Auto Insurance

Your excavation business relies heavily on vehicles to frequently transport equipment, materials, and crews to jobsites and use the excavators. This presents a significant automobile liability risk, which is why commercial auto coverage is another must-have for excavation contractors.

Most commercial auto policies offer property coverage to protect your vehicles from damage and liability coverage to safeguard against bodily injury to others and damage to their property so you can avoid costly claims that can put your business at risk.

3. Safeguard Your Excavation Team with Workers’ Compensation Insurance

Excavation contractors face significant Workers’ Compensation risks due to the nature of their work. Workers’ Compensation insurance pays your employees for medical expenses, compensation, and rehabilitation costs due to a workplace injury, plus it protects your company against monetary losses from a claim.

“Your team often operate heavy machinery and dig trenches, which carry the risk of cave-ins and accidents,” McMillan explains. “Additionally, tasks like clearing trees create hazards from falling branches or toppled trees, posing dangers to workers and third parties. On top of that, exposure to harsh weather conditions increases risks such as lightning strikes and heat-related illnesses, adding notable challenges to the job.”

It’s recommended to check with your Central agent to find out more about Workers’ Compensation requirements in your state.

4. Excavation Contractors Insurance Must Include Protection From Pollution Risks

As an excavation contractor, you face unique, class-specific risks not commonly found in other industries. A major concern is exposure to buried materials during digging or earthwork.

While programs like “Call Before You Dig” help prevent hitting utility lines, they don’t account for illegally buried items such as pollutants or waste. Disturbing these can trigger environmental issues, and under current laws, the contractor who uncovers the pollutant is typically responsible for cleanup costs unless they can prove negligence by another party.

McMillan highlights that these pollutants have often been buried for decades, making liability difficult to shift. Additionally, improper soil erosion control—such as inadequate silt fencing—can lead to runoff issues, as silt can be considered a pollutant in construction. This risk makes pollution liability coverage essential for excavation businesses.

Did you know? Once a year, utilities and excavators come together to promote safe digging during 811 Day, held on August 11th.

5. Inland Marine Insurance Provides Coverage for Expensive Equipment

Inland marine insurance is a type of property coverage that can reimburse the insured if equipment is damaged or stolen at a temporary location. Since excavation contractors frequently transport valuable machinery and tools between sites, equipment floaters like inland marine are a crucial part of protecting your expensive assets.

“This coverage is especially valuable for excavation contractors due to the expensive machinery and high-value tools they rely on, which can be attractive targets for theft,” McMillan explains. “Additionally, since this equipment is often exposed to the elements, it faces risks from events like falling trees, wildfires, and other environmental hazards.”

Learn more: How Much Does Heavy Equipment Insurance Cost?

Work With a Trusted Partner for Excavation Contractor Insurance

Partnering with an insurance carrier like Central, which specializes in the construction industry, ensures your excavation business receives coverage tailored to its unique needs. Our Contractors Plus inland marine policy offers specialized protection with additional limits designed for construction operations.

We also provide General Liability Plus, offering broad liability coverage, including blanket additional insured provisions. Additionally, we offer Crime coverage to protect against employee dishonesty and related risks, as well as Employment Practices Liability (EPL) coverage to safeguard your business from claims of discrimination, harassment, or other employment-related issues.

McMillan emphasizes that when choosing an insurance carrier, it’s essential to find one that offers tailored coverage for your specific needs—something Central excels at for excavation contractors. Equally important is partnering with a financially stable, solvent company like Central, which has been in business for over 100 years.

In the event of a claim, our robust Claims department ensures prompt support and efficient processing. Additionally, we offer dedicated loss control specialists with deep expertise in construction, helping contractors manage risks, prevent claims, and navigate contract language to maintain safer job sites.

Excavator contractor insurance is a fundamental component of your business’s risk management strategy. By investing in comprehensive coverage, you protect your assets, employees, and reputation—ensuring your business can thrive even when unexpected challenges arise.

Reach out to your Central agent today to learn more about excavator contractor insurance and how to keep your company secure.

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