Article Reviewed by a licensed insurance professional: Sam Meenasian (CA dept of insurance license #0F75955).
Estimated reading time: 8 minutes
Key Takeaways
- High-risk industries face challenges in obtaining insurance due to their nature, location, and past claims history.
- Insurers often categorize businesses as high-risk based on the statistical likelihood of claims rather than individual operation practices.
- Key high-risk sectors include construction, bars, trucking, cannabis, and security services, each with specific risks and claims.
- To improve chances of getting coverage, business owners should document safety measures, maintain communication with insurers, and work with knowledgeable agents.
- Finding the right insurance coverage is crucial; high-risk does not mean too risky, and businesses deserve protection.
OK, you own a small business. It’s not a “safe and simple” business. You’re a roofer who has to climb three stories up on a roof in the middle of summer. You’re a trucking company that hauls freight across state lines. You’re a bar owner who has to lock up at 2 a.m. You’re not reckless. You’re just in a business that has more pushback when it comes time to get insured.
You’ve done the right thing: you’ve worked hard to build your business, you pay your bills on time, and you may have even had a few close calls, but nothing that ever threatened your ability to operate. But when you start making calls to insurance companies for quotes, you’re either shocked at the eye-watering premium amounts, or you’re given a hard pass with “Sorry, we can’t cover you. You’re too risky.”
Why Insurers Treat You Like a Problem Child
Insurers have never looked at you with disbelief when they call you high-risk or uninsurable. It’s less about how you operate and more about your industry, your market, and let’s face it, your past.
Certain jobs create more losses. Some neighborhoods have higher loss trends. Some companies provide more chances for accidents to happen.
Insurers don’t see it as a reflection of how careful or reckless you are. In the insurance world, it’s just math.
As you can see, the whole high-risk question is far more complicated than these four bullets. If you really want to know what a carrier may find when they review your business, break it down like this:
They consider what you do.
The more revenue tied to activities that frequently injure people, damage property, or create lawsuit potential, the more conservative a carrier would be.
They consider where you operate.
Two businesses with the same line of work can pay different amounts. Even if their safety history is the same. Why? Location. That’s why. Inner-city retail locations are more crowded. That means more chances for accidents.
They consider how you’ve run your business.
Past claims are clues. Even small claims add up. Coverage lapses are important, too.
They consider the details of your day-to-day operations. (The stuff that never makes it on your marketing plan.)
Do employees rotate tasks or work double shifts? Do you subcontract? Do you keep detailed repair logs, inspections, and training histories? Do you card and enforce alcohol-service policies?
Why Is High-Risk Insurance So Hard to Find?
Cost is one hurdle. Finding an insurance carrier that may consider taking the risk and issuing a policy is the difficult part for many small business owners. You have the funds to pay for insurance, though no one considers taking the risk.
Insurers like predictability. They prefer as few surprises as possible.
Two forces have made it tougher for you to find coverage and affordable pricing:
Restricted Market Availability–Fewer carriers may underwrite coverage for these high-risk industries. That means lower competition and higher prices.
Regulatory Pressure & Underwriting–The more risk, the more paperwork is involved. Not to mention the less leeway in the underwriting process. As well as the much higher bar for acceptance. In other words, insurance companies see this as more work for them and less profit, unless, of course, they, the carrier, charge a higher premium.
5 Industries Insurers Love to Label “High-Risk” (and Why)
1. Construction and Contracting
Contractors are literally working with their hands every day. Construction is full of moving parts, power tools, heights, weather, vehicles, and very hard surfaces. In 2023, private construction employers reported about 173,200 total recordable nonfatal injuries and illnesses (BLS).
Roofers, concrete crews, and demolition crews rank highest in terms of risk.
Frequent claims: Falls, struck-by hazards, tool injuries, property damage
Average claim cost: Workers’ comp severity could be high in hands-on trades. NSC (using NCCI data) reports the average cost for all workers’ comp claims combined for accidents in 2022–2023 was about $47,316.
Insurer’s view: Roofing and general contractors pay two to three times the base premium of lower-risk trades.
2. Bars, Clubs, and Liquor Stores
Add alcohol, and it could multiply your liability. The combination of late operating hours and disruptive customers with dram shop liability creates compounded risks. Many insurance carriers rate bars and late-night venues as higher-liability accounts because alcohol service increases the chance of severe third‑party claims.
In many states, dram shop laws could create liability if an establishment serves a minor or a visibly intoxicated person and that person later causes injury or damage. The rules and defenses vary by state
Frequent claims: Assault, intoxication-related injuries, property damage
Insurer’s view: Many carriers won’t write a bar or club that offers live music or operates late-night hours.
3. Trucking and Logistics
Commercial truck insurance pricing varies widely, while many single-truck operations with their own authority may see higher annual premiums depending on cargo and operating region.
Frequent claims: Collisions, cargo theft, bodily injury
Insurer’s tip: Safety programs can lower your premiums.
4. Cannabis and CBD Retailers
Cannabis laws vary by state. It remains federally controlled and scheduled, however. That alone puts off some big national carriers.
Frequent claims: Theft, product liability, fire damage
Insurer’s fact: Expect to need a specialty carrier.
5. Security and Guard Services
Security contractors are working with other people’s property and their very safety every day. When something goes wrong (even if your people are following procedure to a “T”), your business is the first in line for blame.
Frequent claims: Assault, negligence, false imprisonment
Insurer’s secret: Clean incident reports and bodycam footage save money when things go wrong.
Escaping the “High-Risk” Label
The “high-risk” label assigned to your company does not have to be permanent. Carriers want to see that you run a reputable business with risk management techniques in place. When you begin to demonstrate that storyline, the conversations will change.
The best way to calm an underwriter down is through consistency. Pay your premium on time and don’t let your coverage lapse. Don’t jump from carrier to carrier unless you have a valid reason to.
Insurers will also look at what’s happening in the background with your operations. If you document well, you’re sending the carrier a message that you take risk management seriously. Underwriters love a paper trail because it allows them to see that future losses are less random and more manageable.
Another way to save is by being creative with your insurance structure. Bundling your liability, property, and auto coverages with one company, for example, can shave thousands of dollars off your premium because the carrier will get a look at your overall profile rather than just one piece of your business. Pair that with a modest increase in your deductible (if your cash flow can support it).
You should be keeping them in the loop when you implement new safety measures. They can keep your file updated and position you more favorably when it comes time to renew. Carriers like to see change and communication in a business, and your broker is the voice that can relay that information to them.
You Shouldn’t Look For Coverage Alone
Business owners handling high-risk accounts usually discover at the onset that their choice of agent matters at least as much as selecting the carrier for their business.
The right agent could save you weeks of wasted time and too many market submissions that could lead to multiple declinations and extra underwriting questions. The appropriate agent will present your safety efforts to an underwriter in a way that calms their apprehension and gets them thinking rather than on high alert.
In your search for an agent, look for one that services high-risk industries daily, rather than an agent that is trying to fill their book of commercial clients.
You want someone who is going to ask you operational questions, not just payroll and revenue-based inquiries. Someone who is going to look at your contracts and your equipment and actually has some understanding of how the work you perform gets done. An agent of that caliber will be able to identify exposures.
Many hard-to-place businesses end up in the excess & surplus (E&S) market (also called surplus lines or non‑admitted carrier). These policies could be legitimate solutions when the admitted carriers won’t offer terms, but they may not have protections like state guaranty funds. A specialist broker should walk you through what that means in your state.
You’re Not “Too Risky” — You’re Just Real. And You Deserve Protection.
High-risk doesn’t mean that you’re reckless. It just means that you’re out there making the world work. Dangerous jobs make a difference. And you, and your business, deserve protection.
At USA Business Insurance, we help high-risk businesses from coast to coast get the coverage they deserve — with no runaround. Our specialists can find real solutions that fit your world.
We’ve been doing this for years. Contractors, architects, plumbers, roofers. You
