Guide to Excavator Insurance (2025)
Excavator insurance protects your heavy equipment against theft, damage, and breakdowns while providing liability coverage for accidents on the jobsite.
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Written byBen Luthi
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Ben Luthi
Ben Luthi has been writing about personal finance for over a decade with the intent to help people improve their finances and lifestyle. He’s covered just about every personal finance topic under the sun for a variety of publications, including the Wall Street Journal, Fortune Recommends, Yahoo Finance, Experian, Credit Karma, NerdWallet, and many more. Ben lives near Salt Lake City with his two kids and two cats.
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Edited byBecky Helzer
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Becky Helzer is an editor at Insurify. She loves helping writers express their ideas clearly and authentically. With a diverse background in editing everything from curriculum and books to magazine articles and blog posts, she’s worked on topics ranging from home finance, insurance, and cloud computing to the best tools for home improvement.
A proud graduate of Colorado State University with a degree in technical journalism, Becky lives in Fort Collins, CO, with her husband and their two spoiled rescue dogs.
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Table of contents
Excavator insurance is a specialized type of insurance that protects your heavy machinery from physical damage, theft, and liability risks during excavation work. Without it, accidents, equipment breakdowns, or jobsite theft can halt your construction projects and create significant financial losses.
The cost of an excavator varies depending on its size and capability. A mini excavator costs between $10,000 and $100,000, while large earthmoving machines range from $200,000 to more than $1.5 million.
Repair costs also vary. Minor fixes may run about $500, while major component failures, such as engine repairs or hydraulic system replacement, can cost up to $20,000.
Here’s what to know about excavator insurance coverage, typical insurance costs, and how to choose the best policy for your excavating contractor business.
Quick Facts
Excavator insurance typically costs between $800 and $5,500 annually.
You can purchase stand-alone contractor equipment insurance or bundle coverage with other construction insurance policies.
Most insurance policies exclude damage from wear and tear, negligence, and natural disasters like floods and earthquakes.
What is excavator insurance?
Excavator insurance is a type of insurance specifically designed for heavy equipment. It’s often structured as inland marine insurance, which protects movable property and equipment used across multiple locations.[1] The term “inland marine” comes from old maritime insurance practices but now applies to any property that moves from place to place.
You can buy excavator coverage as a stand-alone policy or include it in a broader contractor insurance package alongside general liability coverage and workers’ compensation.
Common risks that make excavator insurance essential include:
Jobsite equipment theft
Damage from collisions or rollovers
Vandalism at unsecured sites
Fire damage
Equipment breakdown from hydraulic failures or engine problems
Liability from heavy equipment operation
Excavator insurance differs from standard commercial auto or property insurance because it protects your equipment during transport, storage, or active use on construction projects.
In contrast, property insurance typically covers equipment only at a fixed location, while commercial auto policies apply only when heavy equipment is driven on public roads — not when it’s being operated.
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Learn More: How to Get Business Insurance: A Step-by-Step Guide
What does excavator insurance cover?
Excavator insurance coverage protects your business from various risks associated with owning and operating heavy equipment.
These are the main coverage options available:
Physical damage coverage pays for repair or replacement when collisions, fire, vandalism, theft, or weather-related incidents damage your excavator. This core component covers the machine itself and any attached implements.
General liability coverage protects your business if your excavator causes property damage or third-party injuries.
Inland marine coverage protects equipment during transport between jobsites or while stored at different locations. This machinery coverage ensures you have protection for your excavator whether it’s on a trailer, in temporary storage, or on its way to a construction project.
Equipment breakdown coverage pays for sudden mechanical or electrical failures not caused by accidents. These may include hydraulic system failures, engine breakdowns, and computer system malfunctions in modern excavators.
Rental reimbursement coverage pays for the rental of replacement equipment while your excavator undergoes repair after a covered loss. This coverage helps minimize business interruption and keeps construction projects on schedule.
Business interruption coverage compensates for lost income when covered damage prevents you from completing contracts or taking on new excavation work. It helps maintain your cash flow during extended repair periods.
Workers’ compensation covers employees’ medical expenses and lost wages if they’re injured while operating your excavator.
What doesn’t excavator insurance cover?
Excavator insurance doesn’t cover everything, and understanding exclusions helps you avoid unexpected out-of-pocket expenses.
Most excavator insurance policies won’t cover the following:
Wear and tear or lack of maintenance: Rust, corrosion, and damage from poor maintenance or failure to perform routine servicing aren’t covered. This also applies to normal wear and tear from regular use.
Damage caused by unlicensed operators: Most policies state that coverage applies only when trained and licensed operators use your excavator. If an unqualified operator damages your excavator by misusing it, your insurance company may deny the claim.
Intentional damage: Your policy won’t cover any deliberate damage you or your employees cause to the excavator.
Fraudulent claims: If you submit a false claim or misrepresent the circumstances of a loss, your insurer will deny your claim and possibly cancel your policy.[2]
Floods, earthquakes, and other types of natural disasters: Most standard policies exclude damage caused by natural disasters.
How much does excavator insurance cost?
Excavator insurance costs vary based on several factors, including equipment value, selected coverage options, and your industry’s unique risks. Insurers also consider your geographic location and claims history.
Shopping for quotes from various insurance companies is the best way to find competitive rates. Premiums can vary significantly between insurers, even for identical coverage.
Factors affecting excavator insurance costs
Understanding what drives your insurance costs can help you find ways to lower your premiums.
The following key factors affect how much you’ll pay for excavator insurance:
Equipment value and age: Newer, more expensive excavators cost more to insure because replacement costs are higher.
Jobsite risks: Working in areas with high crime rates or severe weather increases risk and raises premiums.
Prior claims and business safety records: A history of frequent claims results in higher premiums. Strong safety protocols and risk-management practices can help you qualify for better premiums.
Coverage limits: If you finance your equipment, your lender will likely require full coverage with specific minimum limits. Higher policy limits mean higher premiums.
Deductibles: Choosing higher deductibles lowers your premiums because you pay more out of pocket before insurance kicks in.
Transportation needs: Frequently hauling your excavator between jobsites may increase premiums due to higher accident risk during transport.
How to choose the best excavator insurance policy
Selecting the right excavator insurance policy requires careful evaluation of your needs and available coverage options. Follow these steps to find the best protection:
Determine your excavator’s replacement value. Get current market prices for your specific make, model, and year to ensure adequate coverage.
Review your liability exposure. Consider your typical work environment: Do you work around utilities or near residential properties? Assess the potential for property damage and third-party injuries.
Select deductibles and coverage limits that match your excavator’s replacement cost. Look at different combinations to balance affordable premiums with adequate protection.
Ask about available endorsements. Ask about additional coverage, like equipment theft protection or coverage for attachments.
Compare policies from several insurers. Get quotes from at least three insurance companies to compare coverage options and premiums.
Review exclusions. Read your policy to see what it does and doesn’t cover, and consider additional endorsements to fill protection gaps.
Ask about discounts. Check for ways to save on your business insurance based on your industry, risk-management precautions, and equipment usage.
Excavator insurance FAQs
These answers to frequently asked questions about excavator insurance can provide more information as you shop for coverage.
Is excavator insurance legally required?
No. While excavator insurance isn’t legally required, liability coverage is often mandated to qualify for projects or if you have employees. General contractors typically require subcontractors to carry insurance, and lenders require you to have full coverage if you finance your excavator. If you have employees, you’ll also need workers’ compensation.[3]
Does general liability insurance cover excavators?
No. General liability coverage protects you from third-party claims if your equipment causes property damage or injuries. To ensure your excavator has protection against physical damage, you’ll need physical damage coverage or inland marine insurance.
How much does it cost to insure an excavator?
You’ll generally pay between $800 and $5,500 per year for insurance, depending on equipment value, location, operator experience, and coverage choices. Compare quotes from multiple insurers to get the best rate.
Can you insure a leased or rented excavator?
Yes. Lease agreements usually require that you insure a leased or rented excavator. You may be able to add rented equipment to your contractor’s equipment policy through an endorsement, or your policy may already include coverage.
Do you need insurance on a mini excavator?
Yes. Mini excavators still pose liability risks and are costly to replace if stolen. With values ranging from $10,000 to $100,000, mini excavators are worth insuring to protect against theft, accidents, and property damage.
Sources
- Insurance Information Institute. "Understanding inland marine insurance."
- Insurance Information Institute. "Insurance Handbook: Background on Insurance Fraud."
- Small Business Administration. "Get business insurance."
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Ben Luthi
Ben Luthi has been writing about personal finance for over a decade with the intent to help people improve their finances and lifestyle. He’s covered just about every personal finance topic under the sun for a variety of publications, including the Wall Street Journal, Fortune Recommends, Yahoo Finance, Experian, Credit Karma, NerdWallet, and many more. Ben lives near Salt Lake City with his two kids and two cats.
Becky Helzer is an editor at Insurify. She loves helping writers express their ideas clearly and authentically. With a diverse background in editing everything from curriculum and books to magazine articles and blog posts, she’s worked on topics ranging from home finance, insurance, and cloud computing to the best tools for home improvement.
A proud graduate of Colorado State University with a degree in technical journalism, Becky lives in Fort Collins, CO, with her husband and their two spoiled rescue dogs.
