As an electrical contractor or electrician, you have a lot on your plate:
- You repair and replace wiring in residential and/or commercial buildings.
- You install new electrical systems in new building construction.
- You inspect electrical systems and the appliances and fixtures hooked up to them for safety.
- And, on top of all of that, you may be supervising employees and running a business.
Failing to have proper insurance and adequate coverage levels leaves your business vulnerable to unexpected events that are all-to-common in electrical contracting.
The right coverage can bring peace of mind and protect you from a multitude of risks.
Real Risks Facing Electrical Contractors and Electricians
Working around and with electricity is dangerous business. Accidents happen all the time. In addition to personal injury concerns for yourself and your employees, there are risks to the health and property of subcontractors, customers and unrelated third parties.
Any of these risks could give rise to costly lawsuits.
Consider just a few hypothetical scenarios that could result in a claim against you:
- The owner of an under-construction home comes unannounced to the jobsite after hours to check on progress, and his son receives a shock when touching exposed wiring.
- Work performed by one of your employees is improperly done, leading to arcing and an electrical fire.
- A customer purchases a faulty switch produced by an unrelated manufacturer but sold at one of your stores, and the faulty product results in a shock or fire.
Contractor Risks Vary by State
Certain states require specific types of coverage so it’s important to understand the requirements for where you do business. For instance, California is a state that requires contractors to be insured for a specific minimum rate.
Most states also require electrical contractors and electricians to carry license bonds and workers’ compensation coverage.
You must carry required electrical contractor insurance coverage. If you don’t, you will be subject to penalties that can quickly add up costing you money, lost time and your business reputation. In fact, you may even lose your license to practice if you don’t carry enough insurance or if you don’t have proof of insurance coverage on file with the appropriate authorities.
What Type of Insurance Do Electrical Contractors Need?
The type of insurance you need will depend on a number of different factors. But there are some general forms of coverage that you will likely need as an electrical contractor or electrician.
For instance, General liability coverage, as the name implies, takes care of your business in the event that accidents occur that cause damage to customer property or injure to them or others while on your premises. It’s broad coverage that takes care of a wide range of potential issues unless specifically identified in the policy. One very important facet of general liability policies is that they’re designed to expand with you and your business. As you grow, your coverage will also grow to offer protection for business expansion or new service offerings.
You may also need auto coverage for your vehicle if you drive to and from client sites or between work sites. The more you drive the greater the risk. Electrician’s auto insurance coverage protects you from having to pay for injuries or property damage that occur from auto accidents. This coverage will also protect you from vehicle theft or cargo losses.
Finally, electrical contractors should have both surety bond coverage and workers’ compensation coverage. Surety bond coverage offers a guarantee to your customers that your bids were based on good-faither information, that you’ll meet your project deadlines and that you will pay your subcontractors. Workers’ compensation coverage is designed to protect your employees in the event they are injured while on the job.
How Much is Insurance for Electrical Contractors or Electricians?
Insurance premiums are based on yearly payroll, gross sales, requested limit, and whether contractors have specific insurance endorsement requirements.
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