Working on electrical systems is always dangerous, no matter how professionally experienced your electricians are. With over 30,000 electrical shock incidents per year – of which around 400 are fatal – everyone involved in designing, installing, and maintaining electrical systems should be insured.
Whether you spearhead a high-profile business or are an individual contractor, you need electrical contractor insurance. Read on to learn everything about this type of insurance.
What Is an Electrical Contractor?
An electrical contractor is a company or business person that designs, installs, and maintains electrical systems. Electrical contractors are not the same as electricians. Electrical contractors employ electricians to work for them, including inside electricians (wiremen), outside electricians (linemen), and those handling integrated systems.
In addition to installing, maintaining, and troubleshooting electrical systems, electrical contractors perform project and client relationship management.
What Is Electrical Contractor Insurance?
You need electrical contractor insurance to be compliant and mitigate lawsuits, on-site accidents, and other risks. However, electrical contractor insurance is not a specific policy but an umbrella term encompassing coverages essential for electrical contractors.
What Does Electrical Contractor Insurance Include?
The exact coverages that may comprise your electrical contractor insurance vary depending on the insurer and your needs:
- Electrician liability insurance
- Tools and equipment coverage
- Workers’ compensation
- Business income, commercial auto, and cyber insurance
Read on to learn more about each of these coverages.
Electrician Liability Insurance
General liability insurance for electrical contractors, also known as E&O insurance, covers bodily injuries and property damage caused to other individuals and businesses due to mistakes, inaccuracies, inadequate work, negligence, etc.
For example, if your electricians installed an electrical system that caused a fire, your electrician liability coverage will pay for the property damage and bodily injuries of third parties, sparing you from exorbitant bills.
Tools and Equipment
From measuring devices to pliers to screwdrivers to power saws, the total cost of your equipment may exceed dozens of thousands of dollars. The contractor’s tools and equipment coverage will reimburse for the loss should your equipment be damaged or stolen.
Workers’ Compensation Insurance
Conducting a business is impossible without workers’ compensation insurance. First, it is mandatory in almost all U.S. states. Second, should you not have workers’ compensation, you would be responsible for your electricians’ medical bills and lost wages.
Business Income Insurance
Business income insurance reimburses for lost income due to a business interruption caused by covered property damage (for example, fire). It can help you keep your business operating during difficult times.
Commercial Auto Insurance
All commercial vehicles must be insured on a commercial auto insurance policy, which may include the following types of coverage:
- Bodily injury and property damage liability coverage
- Medical payments and personal injury protection (PIP)
- Collision
- Comprehensive
- Uninsured motorist coverage
Cyber Insurance
Both high-profile and small businesses may suffer from a breach of cybersecurity. Cyber liability insurance will cover viruses, worms, hacker attacks, and most other cybersecurity risks.
How Much Is Electrical Contractor Insurance?
The cost of electrical contractor insurance depends on your business and the coverage you want to include. The average monthly premium is around $50 for general liability coverage; $300 for workers’ compensation coverage; $150 for commercial auto insurance.
Electrical contractor insurance isn’t cheap, but its limits are usually at least $1 million per occurrence, which will likely be enough should the unexpected occur.
How to Choose the Best Electrical Contractor Insurance?
Research as many providers as you can. Start with renowned companies – Progressive Commercial, the Hartford, AP Intego, Hiscox, etc. – and move to lesser-known insurers until you find your best policy.
FAQ
Is Electrical Contractor Insurance Mandatory?
Electrical contractor insurance is an umbrella term encompassing several types of coverage, some of which are mandatory and some of which are not. For example, commercial auto coverage is mandatory for businesses using commercial autos.
Do I Need Electrical Contractor Insurance?
You need eclectic contractor insurance regardless of the size of your business. Not only is the electrical business risky, but you can suffer substantial financial losses if you are uninsured.
How Much Is Electrical Contractor Insurance?
The cost of electrical contractor insurance depends on the size of your business, your state and location, and the type and amount of coverage. For example, general liability coverage would cost around $50 per month. But then again, chances are you will need several types of coverage in addition to liability coverage.
How to Get Electrician Insurance?
You can apply for electrician insurance online by specifying the basic information about your business, such as size and revenue.
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.
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