Contractor Insurance Cost Per Job Calculator
Allocate annual GL, workers comp, auto, bonding, and license costs into bid-ready insurance burden per job.
Umbrella, inland marine, tools, broker fees
Result
- Annual insurance cost
- $25,000
- Insurance as % of revenueAnnual insurance divided by annual revenue
- 2.5%
- Insurance per labor hour
- $5
- Insurance per job
- $250
- Allocated insurance on this jobBy job revenue
- $1,250
- Insurance % of job price
- 2.5%
- Burdened job costDirect cost plus allocated insurance
- $35,250
- Current margin after insurance
- 29.5%
- Required price for target margin
- $44,063
- Price shortfall to target
- $0
This estimate is based on national average costs and may vary by region, project specifics, and market conditions. Use as a starting point for your bids.
Insurance is not a vague overhead line
General liability, workers comp, commercial auto, bonding, licenses, and umbrella coverage are real costs attached to the risk of doing jobs. If those premiums stay buried in overhead, bids look cleaner but margins quietly shrink.
This calculator turns annual insurance spend into three practical burden rates: percent of revenue, cost per labor hour, and cost per job. Then it applies the burden to one job so you can see whether the current price still clears your target margin.
Choosing the allocation basis
- By revenue works when your insurance burden generally rises with company volume and job size. It is the easiest default for mixed work.
- By labor hours works when field exposure is the real driver, especially where workers comp is a large part of the annual premium.
- Equal per job works for many similar service calls. Use caution if one job is a $500 ticket and the next is a $75k project.
A worked example
Suppose a contractor pays $25,000 per year across GL, workers comp, commercial auto, bonding, licenses, and related coverage. At $1,000,000 annual revenue, that is 2.5% of sales. A $50,000 job should carry $1,250 of insurance burden before target margin is calculated.
If direct job cost is $34,000, adding insurance makes the burdened cost $35,250. To hold a 20% gross margin, the job needs to sell for $44,063. If the current price is lower than that, insurance is one of the costs eating the margin.
How to use this in bidding
Update the annual premiums when policies renew, then keep the allocation basis consistent for a full quarter or year. At year end, compare total allocated insurance across jobs to actual premiums paid. If they are far apart, your volume assumptions or allocation basis need to be reset.
Frequently asked questions
Should insurance be in overhead or job cost?
It can be tracked either way, but it has to be recovered somewhere. Many contractors treat insurance as fixed overhead, then allocate it back into bids by revenue, labor hours, or expected job count. The key is consistency: your bids should recover the same annual insurance cost your P&L actually pays.
Which allocation basis should I use?
Revenue is a simple default when insurance scales with sales volume. Labor hours are better when workers comp or field exposure is the main driver. Equal per job works for service contractors with many similar tickets, but it can overburden small jobs and underburden large projects.
Does this calculate my actual premium?
No. Your carrier or broker prices the policy. This calculator takes the premiums you already pay or were quoted and turns them into bid-ready job burden so the cost is not forgotten.
Should I add markup on allocated insurance?
Usually yes. If insurance is part of the cost required to deliver the job, it should be inside the cost base you mark up to reach target margin. Otherwise you recover the premium but let it dilute profit.
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