The electrician business is a risky one with a variety of specific dangers. This implies that business insurance coverage isn’t only recommended but also mandated by law.
The insurance requirements vary for electricians insurance. For instance, electricians can store all their business equipment in their vehicle, while others may lease an industrial property to store their equipment. A few may have electrical equipment on their workplace. Some might work on their own and some might have employees.
It is important to protect your business by ensuring that you have the right insurance policies. Here are some tips business owners must be aware of to ensure they have the right insurance coverage and save on costs for insurance.
Why Should Electricians Be Insured?
The most common type of business insurance electricians require is the liability insurance. Professional liability insurance covers electricians who cause physical injury or damage to a customer. For instance, faulty wiring of electrical boxes can cause damage to the home entertainment system and the same issue at a home of a client may cause bodily injury to the client.
To allow the electrician to become licensed an business and be licensed as a professional, they must have liability insurance. A smart customer will never choose an electrician that is not insured as a business coverage for liability.
Electricians with employees or employees are required to purchase workers’ compensation insurance for their business. This is legally required insurance for an business.
What Does Business Electrician Insurance Cover?
Insurance coverage for businesses may be general or specific. The kind of coverage is determined depending on the type of insurance. Here are the details for the various types of insurance policies which is necessary to be used for business reasons:
Business General Liability Insurance
General Liability Insurance is a basic business insurance legally required. General liability insurance covers the electrician who is responsible for bodily or property injury to a client as a result due to professional negligence. This policy will cover medical expenses incurred by the client.
General liability insurance provides the primary business insurance electricians as well as other contractors – require. As far as small business insurance requirements are concerned, this is an absolute necessity.
Commercial Property Insurance
Commercial property insurance may be necessary for electricians who leases or owns a space for storage of equipment, as well as furniture for office use. The electrician insurance may be required if an electrician has business properties on personal property – for instance, in garages or sheds at an apartment. The homeowner’s insurance policy likely won’t cover commercial properties however, it is possible to obtain an insurance “rider” to increase the coverage of the homeowner’s insurance policy.
Business Interruption Insurance
Electricians typically add this coverage to their general insurance for liability. The interruption to business operations could be caused by Mother Nature – such as an extreme weather event or flooding that renders it impossible to conduct business. It also covers business interruptions caused by the theft of equipment and is an ideal additional insurance policy to safeguard your business in order to safeguard equipment as well as to pay for lost wages. The insurance is usually included in General Liability Insurance.
Workers Compensation Insurance
Worker’s Compensation insurance is mandatory for any business which has at least one employee. It will cover medical expenses for employees. Workers’ Compensation insurance is required by law.
Commercial Auto Insurance
Insurance for commercial autos is required for work vehicles regardless of whether it’s also employed for private use. If there’s an accident which involves a vehicle that is filled with machinery for work the personal insurance won’t protect the equipment from damage. A contractor or electrician shouldn’t permit an employee who isn’t listed on the insurance policy use the vehicle even if they want to take breaks for lunch.
Other Types of Insurance Coverage for Electricians
The general liability insurance policy is the best place to start when looking for electricians. Alongside the general liability insurance it is possible to purchase “add-ons” electricians might require. Luckily they are “add-ons” are usually combined at a reduced rate along with general liability insurance included in the Business Owner’s Policy or BOP.
commercial umbrella insurance Also called a BOP this kind of policy allows the business owner to add general liability insurance, in addition to additional types of protection. While there’s a broad variety of insurance options available under the umbrella of a business owner’s insurance policy, the worker’s compensation insurance will not be included in the BOP. This Worker’s Compensation insurance policy is always a separate policy.
- Breakdown insurance for equipment This kind of insurance policy does not cover breakdowns caused by the normal wear and tear on equipment. However, it provides the ability to fix or replace equipment that fails as well as to cover the loss of income.
- Auto insurance for non-owned and hired insurance When the business automobile is in repair shop, the use of a personal vehicle such as an employee’s vehicle or client’s vehicle to use for business use isn’t the right way to take. To avoid waiting until repairs are completed an electrician might require a temporary rental vehicle.
- Equipment and tools for contractors insurance – This kind of insurance is essential for electricians who keep mobile equipment on a work site to use for business use. You’ll be able to protect your business and expensive equipment from financial losses resulting from damage or theft.
- Installation floating This kind of business insurance covers things that aren’t considered equipment. It covers things like conduits, copper wires as well as electrical box.
- Errors and Omissions insurance – This kind of business insurance protects you if your client sues you accusing you of faulty works, damages to the property or medical expense coverage. It will cover legal defense, as well as other legal expenses. E and O insurance is often referred to as the professional liability insurance.
- Bond of surety A contractor usually has to get “bonded as well as insured” before getting the business license and starting to offer services. It’s a type of payment bond and a guarantee of the business will be able to perform the task (performance bond). Small business owner ought to think about getting an assurance bond through the Small Business Association that offers these services.
How Much Does Electrician Insurance Cost?
Electricity costs for insurance are reduced when combined with a BOP. A typical BOP would include the general liabilities, business interruption services and commercial property insurance.
Here are some of the most basic numbers to get you started:
- General liability $500
- Commercial Auto $1500
- Tools and Equipment $500
- Worker’s Compensation $3,000
There are firms who focus on business assurance policies. We’ve compiled a list of our top choices.
Best Places to Get Electrical Contractor Insurance
Before you begin to shop before you shop, sign up with your state or local electricians’ union. You can get insurance information through its members’ networks.
1. State Farm
State Farm has been an insurance company that is well-known and has a long track record of offering business insurance. The company can provide the “rider” to business owners who maintain equipment on a part of their personal property.
Biberk provides immediate and precise electrician insurance coverage for electricians. It is a favorite among contractors who work part-time who require insurance for specific durations, and even for just one or two days.
Progressive can be an choice that gives low-cost coverage. It provides discounts on combinations like general liability along with commercial vehicle insurance.
Next insurance is a favorite among entrepreneurs with small budgets and self-employed contractors. Next insurance offers a range of options.
5. The Hartford
The Hartford is a different long-standing company that has decades of experience in providing insurance protection for businesses.
Nationwide provides discounted rates in the event that business policy insurance is bundled.
Are Electricians Legally Required to Carry Business Insurance?
Yes. To be licensed, electricians must be insured as a business insurance.
Does Electrical Contractors’ Insurance Cover Employees?
No. Electrical contractors must purchase Worker’s Compensation insurance in order to provide protection for employees. Every small business with an employee or employees should purchase Worker’s Compensation insurance. It is required by law.
How Much Electrician Liability Insurance Do You Need?
Most insurance policies cover up to the $500,000-$1 million mark and higher. Electricians should take into consideration the value of the buildings in which the work is expected to be performed.
As an example what is the electrical contractor doing tasks for an office center or a large factory or even a luxurious home? Take into consideration the extent of damage to property that could be incurred by the customer – which could be a multi-million dollar undertaking.
An electrician may begin with a certain amount of liability insurance and then increase it as required. While the electrician might be working on a house worth $100,000 but the expense to replace the home based on the current cost of the materials and labor – may be significantly higher than the current value of the home or assessment.
The price of insurance may differ dependent on the deductible determined. You are able to experiment with the deductible amount to check how much the increase affects the monthly cost. But, in most cases, the amount of a change in cost of the monthly premium isn’t worth the risk It is best to stay to the smallest deductible.
Does Business Insurance Differ by State?
Yes, and for a variety of reasons. Costs vary across states, with limits on the amount of responsibility that a client may be able to claim.
The cost of Workers’ Compensation can also differ, dependent on whether it is determined by value of the claim. In the event that a particular state an abundance of Worker’s Compensation claims, the amount of insurance for that state will be greater.