As a solar contractor, your work is vulnerable to possible missteps that could result in damage to the customer’s home or harm to the workers. You are also at risk of losing equipment due to damage or theft. You probably have to consider getting solar contractor insurance to minimize the risk of damaging customers’ properties.
This article discusses some important considerations for solar contractors, including which solar installation contractor’s insurance options may interest you.
Importance of Solar Insurance For Contractors
The right solar insurance program tries to build trust with your clientele and reduces your cost of risk. Regardless of your solar business type, protecting your investment from risks is important.
Typically, most solar businesses may have multiple exclusions that may limit operations or block compensation in the case of a claim. Even if the claim was trivial, you could end up paying for the defense charge or damages that may arise.
For this reason, it could help if you seek services from a broker who understands the nature of your business so that they may recommend a comprehensive cover with minimal exclusions.
General Liability Insurance
As a solar contractor, your work may involve performing services at your client’s location. Therefore, there could be a greater risk of property damage or bodily injury to third parties. In this case, you can consider general liability coverage to protect you and your business’ assets by offering a layer of defense against probable negligence lawsuits.
Typically, general liability insurance covers the following:
- Bodily harm to another person at your business premises and the client’s location. For instance, a visitor to your client’s place may trip over a tool left out by your employees and injure their body. They can sue for medical expenses incurred and lost income.
- Damage to your business reputation due to copyright infringement, slander, invasion, false arrest, libel, and wrongful eviction.
- Losses incurred after you have finished working on a project for a client; examples include installing wiring, distributing items, and fixing appliances. For example, the policy would cover you from claims if you break a skylight while mounting solar panels on a client’s roof.
- Medical costs incurred by an individual injured on your business premises. It could be a visitor, customer, trespasser, or client, and is payable regardless of whose fault it was. Most of the time, liability insurance for solar panel installation is paid to prevent costly lawsuits that may occur if someone gets injured when mounting the equipment.
- Advertising injury liability covers losses caused by your promoters, including ad trashing a competitor.
Liability insurance for home solar panel installation may cover your solar installation equipment, tools, and office equipment in the event of damage or theft. Typically, it encompasses coverage of large industrial and commercial solar equipment against theft, loss, or decline in revenue.
Solar projects are exposed to harsh elements and perils such as hail, flood, wind, earthquakes, storms, and fires. Solar insurance can reduce costly repairs or equipment replacements due to damage or loss.
Also, it minimizes equipment downtime and ensures there’s continuity of business. You could get financial compensation should a loss to your property occur. Usually, solar property insurance may include property assets like batteries, photovoltaic systems (solar panels), monitoring gadgets racks, technical equipment, and inverters.
It may also cover other assets such as office furniture, machinery, installation equipment, tools, and computers. If you have a large solar project, you can consult insurance carriers for solar installation companies, who may develop a tailored program to suit your needs.
Other Components of Property Insurance
Besides offering coverage for your physical assets, property insurance may cover income from your solar projects and energy certificates (RECs). Some policies may exclude specific perils such as cyber hacking, flood, terrorism, and earthquake risk. Ensure that the police cover all risks except those omitted explicitly in the policy document.
Builder Risk and Inland Marine Floater Insurance
- Floater property insurance can cover equipment on site, assets held for other people, or in transit. This business insurance coverage protects solar equipment, including storage, tools, racking systems, panels, and inverters owned by a solar contractor, developer, or solar supplier partner.
- Inland marine insurance protects your business assets while transported from one area to another.
- Builder risk insurance is broader than the floater option because it covers buildings and lost income or time. Notably, both policies may exclude certain perils such as floods, missing property, fraud, and earthquakes.
Tools and Equipment Coverage
Solar project tools and equipment often are pricey, and their replacement may cost hundreds of dollars. Therefore, you may consider separate tools and equipment coverage to protect your pricey work tools.
Solar Panel Insurance
Solar panel insurance covers most risks, but there may be exclusions in some states – for example, risks due to natural calamities such as floods. Depending on location, you may consider a specific peril endorsement on your property. However, this may come at an additional cost.
Workers’ Compensation Insurance
Worker’s compensation is a form of insurance that protects your business and the employees if they get injured or become sick due to work-related activities. As a solar contractor, you may cause various risks, such as:
- Falls from tall buildings and electrocution could lead to disability or death.
- Lifting and handling heavy solar panels could lead to strains, sprains, muscle pulls, and back pain.
- Poor handling of solar panels can quickly heat up and may cause burns.
- Trips and falls due to poor harnessing can lead to non-fatal injuries.
The solar industry in the U.S. has over 250,000 workers taking up various roles. These employees are exposed to various risks daily, so employers must ensure they’re well protected from occupational hazards. Safety issues are common, so solar installation providers must have preventive measures to mitigate the risks.
With solar panel installation worker’s compensation insurance, you may not pay for medical costs incurred by your employees due to work-related injuries out-of-pocket. In the unfortunate event, an employee dies, your business could be covered against claims and suits. Often, the employee may take some time off to recuperate; so, the policy ensures the income lost is supplemented.
The main component of workers’ compensation is Employer’s Liability, which covers your business from lawsuits of negligence that led to their injury. As well, it may include coverage against claims of poor working conditions or unsafe work environments.
Factors Influencing Workers’ Compensation Insurance Requirements
Whether you are a large company with many employees and large solar projects or a single solar contractor with no employees, workers’ compensation protects you and your company. Paying for work-related accidents could cost your business a lot of money, so it’s crucial to be financially protected. Workers’ compensation insurance may vary depending on multiple factors.
- Workers’ compensation insurance requirements may vary depending on your state or the client hiring you. Some parties may require solar contractors to have a certificate of insurance before awarding the job.
- Additionally, most states require contractors and companies to have workers’ compensation policies. However, the requirements may vary from state to state. For instance, you aren’t required to have a worker’s compensation policy if you are in Alabama and have fewer than five employees.
Nonetheless, this doesn’t mean that accidents may not occur. It’s essential to have coverage regardless of the state’s rules so you can cover the medical bills if anything happens.
- The worker’s compensation type may depend on your number of employees and location. If you are a single-person contractor without employees, a simple minimum workers’ compensation policy is sufficient since you could use it to get contracts or be hired. Furthermore, it can provide coverage if you get injured onsite.
- If you’re a large company providing solar installation projects, you can get a broader policy to offer full coverage to you and your employees. If you need to figure out the type of workers’ compensation policy to take out for your business, you can consult with an expert.
Other Types of Solar Insurance Policies For Contractors
Here are other solar insurance policies you may consider for your solar business.
Professional Liability Insurance for Solar Contractors
Professional liability insurance for solar contractors is also known as errors & omissions. It can cover the claims due to professional work done for your customers, including engineering, consulting, advice and design.
An umbrella policy provides coverage above your primary layer of protection. It bumps up your cover and seals the exposure gap by having an extra level of protection. In addition to an umbrella policy, you can also have excess solar panel installation insurance stacked above the general liability and umbrella policies.
Cyber and Data Breach Policy
If you are a community solar installer and your services include engaging clients online through billing or remote monitoring of their solar systems and the performance of the equipment, your business may be exposed to cyber and data breach threats. You can consider a cyber and data breach policy to protect the reputation of your company and clients, who may be the primary target of cyber crimes such as malware and phishing.
Data protection laws vary from state to state, with some having the toughest. For example, Utah, Colorado, Virginia, California, and Connecticut have comprehensive data privacy statutes. Therefore, you need cyber insurance to help pay for data breach-related expenses, notification costs, IT forensics, public relations, and outside legal counsel.
Employment Practices Liability
Employment practices liability policy protects your business from lawsuits related to unlawful employment practices by your employees. Staff, whether permanent, part-time, seasonal, job applicants, or voluntary, may file claims against your company, including;
- Failure to hire.
- Gender discrimination.
- Unlawful termination.
- Sexual assault.
- Racial bias.
- Pregnancy discrimination.
Commercial Auto Insurance
While conducting your everyday solar projects, you may need a vehicle or even a fleet of vehicles for larger projects. Commercial auto insurance protects your vehicle in an accident or theft.
Additionally, your solar business could be exposed to risks if you hire or rent out vehicles for work-related activities such as running office errands and meeting with clients.
A perfect example is when your employee drives your company truck and rams it into a different vehicle or property, and the owner may sue your business. Your commercial auto policy would cover medical expenses and legal costs.
Like any other auto insurance policy, the premiums may vary depending on multiple factors, such as your years in business, driving history, credit report, and location. If you have a concern, like why is car insurance so high, you can shop around and compare different providers’ products.
Frequently Asked Questions
How Much Does Solar Insurance For Contractors Cost?
When filling out an insurance application for solar installation, it’s important to note that costs may depend on the type of coverage, premiums payable, solar risk, and underwriters.
What Does My Solar Business Require A Solar Proper Insurance Policy?
Solar projects are exposed to many risks, such as harsh weather, theft of panels and fires. Having property insurance protects your business from financial losses in the event of a lawsuit or claim.
What is Commercial Auto Insurance For Large Solar Projects?
Large solar projects may require commercial auto insurance because they may have vehicles for transporting heavy solar equipment and panels. Ideally, these vehicles should be protected against accidents and theft. In addition, if you offer building retrofits, that, too, should be included in the auto policy.
How Can I Protect My Solar Business Against Cyber Crimes?
You can protect your solar business against cyber crimes by taking out a cyber and data breach policy.
As a solar contractor, your work may expose you to risks such as climbing buildings, damaging your customer’s roof when installing panels, and electric shock. Unfortunately, many off-the-shelf insurance policies may only partially protect you and your business.
Such a policy can lead to expensive claims and business losses. Conversely, a broad solar energy installation insurance policy will give you peace of mind and help you feel confident about your investment.
Oleksandr is an expert in deep research. He covers insurance topics across four major insurance verticals – auto, health, life, and home insurance – while taking into account the legal landscape of the state in question. Come rain or shine, you can expect regular quality blogs and timely updates from Oleksandr.