The Impact of Insurance on Bidding
Insurance plays a substantial role in the bidding process , influencing the overall cost structure , risk management , and competitiveness of bids .
As far as cost considerations , the rate of insurance premiums , including general liability , workers ’ compensation , professional liability , and builder ’ s risk insurance , must be factored into the bid . These premiums can increase the total bid amount .
Contractors with higher insurance costs may submit higher bids to cover these expenses , making them less competitive .
But contractors with a lower Experience Modification Rate ( EMR ) typically pay lower workers ’ compensation premiums , allowing them to bid more competitively .
Risk management plays an important role in the impact of insurance on bidding . Some projects may require specific insurance policies , such as wrap-up insurance ( OCIP / CCIP ), which can affect the cost of the bid . Insurance also helps manage and allocate risk between the contractor and client .
Clients can specify minimum insurance coverage requirements in the bid
FIRST QUARTER 2025 CONTRACTOR TOOLS - 37