Electrical Contractors Insurance Policy Information
Electrical Contractors Insurance. Electrians make the connections that allow electricity to flow and power homes and businesses. From lights to computers and from appliances to televisions, people rely on the services that you provide to make their lives easier and more convenient.
Electrical contractors install, service, maintain and repair electrical wiring, conduits and fixtures both inside and outside of residential and commercial buildings. Inside contractors install electrical wiring used for powering machinery, equipment, and lighting systems. Outside contractors install overhead power lines and underground electrical cables.
Most states require electrical contractors to be licensed. The contractor may provide 24 hour emergency service.
While the services you provide are invaluable, what happens if an accident occurs or if you damage someone's property? You could be held liable for medical expenses, the repair or replacement of damaged property, and even legal action. Electrical contractors insurance can protect you from severe financial strain and devastation.
Electrical contractors insurance protects your business from lawsuits with rates as low as $47/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked electrical contracting insurance questions:
- What Is Electrical Contractors Insurance?
- How Much Does Electrical Contracting Insurance Cost?
- Why Do Electricians Need Insurance?
- What Type Of Insurance Do Electrical Contractors Need?
- What Are Electrical Contractors Risks & Exposures?
- What Does Electrical Contractors Insurance Cover & Pay For?
What Is Electrical Contractors Insurance?
Electrical contractors insurance is a type of insurance that is specifically designed for businesses that provide electrical services, such as installation, repair, and maintenance of electrical systems.
This type of insurance typically includes coverage for property damage, liability, and workers' compensation. It may also include coverage for equipment breakdowns, business interruption, and loss of income.
The purpose of electrical contractors insurance is to protect the business and its owners from financial losses that may result from accidents or other incidents that occur while working on electrical systems.
How Much Does Electrical Contracting Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for electrical contracting businesses ranges from $47 to $69 per month based on location, size, payroll, sales and experience.
Why Do Electricians Need Insurance?
Electricians need insurance for a variety of reasons. Firstly, insurance protects electricians from financial liability in the event of an accident or injury on the job. If an electrician is working on a project and accidentally causes damage to a customer's property, the electrician could be held financially responsible for the damages. Insurance can help cover the cost of repairs or replacements, protecting the electrician's personal assets.
Secondly, insurance can protect electricians from legal liability. If a customer is injured as a result of an electrician's work, the electrician may be sued for damages. Insurance can help cover the cost of legal fees and any settlement or judgment that may be awarded.
Finally, insurance can protect electricians from loss of income due to an unexpected event, such as an injury or illness that prevents them from working. This type of electrical contractors insurance can help them pay their bills and support their families while they are unable to work.
Overall, insurance is an important protection for electricians, helping to safeguard their financial and legal well-being in the event of an accident or other unexpected event.
What Type Of Insurance Do Electrical Contractors Need?
As an electrician, there are several types of electrical contractors insurance policies that can protect you, your business, your employees, and your clients. Some of the most important coverages electrical contractors should carry include:
General liability insurance. If a third party sustains an injury or their property is damaged as a result of the services that you provide, professional liability coverage will protect you from the costs that are associated with medical bills and repairing or replacing the damaged property. If a client files a lawsuit against you, this type of policy will help pay for legal defense fees. For instance, if a faulty connection damages appliances, your CGL would help to pay for those damages.
Errors and omissions. This type of policy offers protection for any negligence claims that are filed against you, as well as for claims stating that you failed to perform a service you promised. Errors and omissions insurance provides coverage for negligence (whether true or alleged), legal defense fees, and damages that occur after you completed your service.
Commercial property. If your business out of a physical location, it's a wise idea to carry commercial property insurance. This policy will protect the building your business is located in, as well as the contents within it. If an act of vandalism is committed or your building or property are damaged in a storm, this coverage will help pay for any necessary repairs or replacements.
Workers compensation. If you employ a staff, workers compensation insurance is a must; in fact, in most states it's a legal requirement. This type of coverage will pay for any injuries or illnesses your employees may sustain while they are on the job. For instance, if a worker is connecting wires and is electrocuted, workers comp will help cover the cost of medical care and lost wages. If an employee perishes as a result of an accident, this policy will also pay out death benefits to his or her dependents.
Contractors' equipment coverage. You use expensive tools while you're on the job, and if those tools are damaged, the cost of replacing them can be extensive. Contractors' equipment coverage will protect the tools and equipment you use on job sites.
These are just some of the different types of insurance policies that electricians are required to carry or should seriously consider investing. Overall, it is important for electrical contractors to have a comprehensive insurance plan in place to protect their business and employees against potential liabilities and risks.
What Are Electrical Contractors Risks & Exposures
Premises liability exposures at the contractor's office are generally limited due to lack of public access. Outdoor storage of materials may create vandalism and attractive nuisance hazards.
Off-site exposures are extensive. Electrical voltage must be turned off at the job site to reduce the risk of electrical burns or electrocution to others entering the area, and turned back on after work stops, all while minimizing any disruption of electrical service to other homes or businesses in the vicinity. Electrical work can be invasive and require work throughout a home or business, resulting in a high potential for property damage.
The area of operation should be restricted by barriers and proper signage to protect the public from slips and falls over tools, power cords, building materials, and scrap. If there is work at heights, falling tools or supplies may cause bodily injury or property damage if dropped from ladders and scaffolding. During construction, other contractors typically depend on electricity for lighting and power to perform their work.
In existing structures, the contractor must take care to control the electrical flow as new lines are installed alongside existing ones. Power fluctuations may damage sensitive equipment. Exterior electrical contractors must notify other utilities to prevent down time to their customers and must prevent surges to their own customers.
Contractors laying underground cables should verify the absence of other utility lines prior to digging to avoid cutting into gas, water or communications cables. Underground laying of cables involves trenching which requires physical barriers to prevent others from falling into open areas.
Completed operations liability exposures can be severe due to improper wiring or grounding. Both power failures and power surges resulting from the contractor's negligence may result in significant bodily injury or property damage. Work for medical facilities, large manufacturers, and alarm system installation can present the potential for catastrophic loss. Warranties, guarantees, and maintenance agreements, in which the contractor promises to keep a system in operation, should be reviewed.
Environmental liability exposures may exist if the electrical contractor is responsible for the disposal of old capacitors and other heavy-duty electrical equipment as these may contain PCB's. Disposal procedures must adhere to all EPA and other regulatory standards. Proper written procedures and documentation of both the transportation and disposal process is important.
Workers compensation exposures vary based on the size and nature of the job. Electrical burns are common; electrocution can occur from the use of high-voltage lines. Injuries can occur from working with hand tools, slipping or falling, back injuries such as hernias, strains and sprains from lifting or pulling cable, and the carelessness of employees of other contractors. Minor injuries may be frequent even when the severity exposure is controlled.
Failure to enforce basic safety procedures, such as power shutoff prior to commencing certain operations, may indicate a morale hazard. Employees must be carefully selected, trained and supervised. When work is done on ladders and scaffolds, employees can be injured from falling, being struck by falling objects, or adverse weather conditions. Laying underground cable may be near power and gas lines. Trench collapse can result in workers being suffocated or buried underground.
Property exposures at the contractor's premises are generally limited to an office and storage for supplies, tools and vehicles. Electrical wiring is not combustible but the insulating sheathing produces a black oily smoke when burnt and can be difficult to extinguish once started. Proper storage with good aisle space is important for preventing fires.
Inland marine exposures include accounts receivable if the contractor offers credit to customers, computers, contractors' equipment and tools, goods in transit, installation floater, and valuable papers and records for customers' and suppliers' information. Equipment consists mainly of hand tools and ladders unless there is line construction or machinery installation. Line construction may involve the use of cherry pickers and similar equipment for overhead lines, or trenchers and other digging equipment for laying underground cable.
Some may be rented from or loaned to others. Goods in transit can be damaged by collision or overturn. Copper cable and wiring have high resale value and can be target theft items during transit or while located at job sites. Other hazards to tools and equipment and to materials awaiting installation include vandalism and fire.
Crime exposure is primarily from employee dishonesty. Background checks, including criminal history, should be performed on all employees providing services to customers or handling money. All ordering, billing and disbursement should be handled as separate duties with reconciliations occurring regularly.
Commercial auto exposure is generally limited to transporting workers, equipment and electrical cables and supplies to and from job sites. MVRs must be run on a regular basis. Random drug and alcohol testing should be conducted. Vehicles must be well maintained with records kept in a central location. Vehicles may have special modifications or built-in equipment such as lifts and hoists. Large cables may be awkward and require special handling and tie-down procedures.
What Does Electrical Contractors Insurance Cover & Pay For?
Electrical contractors may be sued for various reasons, including:
- Property damage - Electrical contractors may be held liable for damage caused to the property they are working on. For example, a contractor may accidentally damage a wall or ceiling while installing wiring or electrical fixtures.
- Personal injury - Electrical contractors may be sued if a person is injured on the job site. For example, if a worker falls from a ladder while installing lighting fixtures, the contractor may be held responsible for the worker's injuries.
- Electrical shock - Electrical contractors may be sued if someone suffers an electrical shock due to faulty wiring or installation. This can result in serious injuries or even death.
- Code violations - Electrical contractors may be sued for code violations that cause harm or injury. For example, if a contractor fails to install a ground fault circuit interrupter (GFCI) in a bathroom, and someone is electrocuted, the contractor may be held liable.
Insurance can protect electrical contractors from lawsuits by providing coverage for legal fees and damages. Here are some examples:
General liability insurance - This insurance can protect contractors from property damage and personal injury claims. For example, if an electrical contractor accidentally damages a customer's property while working, general liability insurance can help pay for the damages.
Professional liability insurance - This insurance can protect contractors from claims of professional negligence or errors and omissions. For example, if a contractor fails to properly install wiring and it causes a fire, professional liability insurance can help pay for damages.
Workers' compensation insurance - This insurance can protect contractors from claims of personal injury by workers on the job site. For example, if a worker is injured while working on an electrical project, workers' compensation insurance can help pay for medical expenses and lost wages.
Equipment insurance - This insurance can protect contractors from damage or loss of equipment on the job site. For example, if an electrical contractor's equipment is stolen or damaged, equipment insurance can help pay for repairs or replacement.
In summary, insurance can help protect electrical contractors from lawsuits by providing coverage for legal fees and damages resulting from property damage, personal injury, electrical shock, code violations, and other liabilities.
Commercial Insurance And Business Industry Classification
- SIC CODE: 1731 Electrical Work, 1623 Water, Sewer, Pipeline and Communications and Power Line Construction, 7629 Electrical Repair Shops, NEC
- NAICS CODE: 238210 Electrical Contractors and Other Wiring Installation Contractors, 237130 Power and Communication Line and Related Structures Construction, 811211 Consumer Electronics Repair and Maintenance, 811219 Other Electronic and Precision Equipment Repair and Maintenance
- Suggested Workers Compensation Code(s): 5190 Electrical Wiring - Within Buildings & Drivers, 3724 Door - Installation - Overhead & Drivers, 7538 Electric Light or Power Line Construction & Drivers
Description for 1731: Electrical Work
Division C: Construction | Major Group 17: Construction Special Trade Contractors | Industry Group 173: Electrical Work
1731 Electrical Work: Special trade contractors primarily engaged in electrical work at the site. The construction of transmission lines is classified in Industry 1623, and electrical work carried on in repair shops is classified in Services, Industry Group 762. Establishments primarily engaged in monitoring of burglar and fire alarms with incidental installation are classified in Services, Industry 7382.
- Burglar alarm installation-contractors
- Cable splicing, electrical-contractors
- Cable television hookup-contractors
- Communications equipment installation-contractors
- Electrical repair at site of construction-contractors
- Electrical work-contractors
- Electronic control system installation-contractors
- Fire alarm installation-contractors
- Highway lighting and electrical signal construction-contractors
- Intercommunications equipment installation-contractors
- Sound equipment installation-contractors
- Telecommunications equipment installation-contractors
- Telephone and telephone equipment installation-contractors
Electrical Contractors Insurance - The Bottom Line
Business insurance can save you from severe losses that could cause severe financial strain and potentially shut down your business. To learn more about electrical contractors insurance, speak to a reputable insurance agency that has experience with servicing professionals in your field.
Additional Resources For Contractors & Home Improvement Insurance
Learn about small business contractor's insurance, including what it covers, how much it costs - and how commercial insurance can help protect your contracting business from lawsuits.
- Air Conditioning Systems Installation Repair
- Appliance Repair & Service
- Blacksmith & Metal Workers
- Boat Repair & Dry Docks
- Boiler Contractors
- Builders Risk
- Building Cleaning & Maintenance Services
- Cabinet Installer
- Cable And Satellite TV Installer
- Chimney Sweep
- Cistern Contractors
- Contractor Liability
- Curtain Cleaners
- Deck Builders
- Door And Window Installers
- Dryer Vent Cleaning
- Drywall Contractor
- Electrical Contractors
- Environmental Remediation Contractors
- Fence Installation
- Fire Sprinkler Contractors
- Fire & Water Restoration Contractors
- Flooring Contractor
- Furniture Repair
- Garage Door Installer And Repair
- General Contractors
- Glass Contractor
- Glazier Insurance
- Gutter Installation And Repair
- House Cleaning
- HVAC Contractor
- Insulation Contractor
- Janitorial Cleaning Services
- Lawn Care
- Lawn Irrigation Sprinkler System Installation
- Oil And Gas Well Drilling Contractors
- Paperhanging Contractors
- Plastering And Stucco Contractor
- Pressure Washing Contractors
- Propane And Fuel Dealers
- Rug, Upholstery & Carpet Cleaning
- Sandblasting Contractors
- Security Alarm
- Septic Tank Cleaning
- Siding Contractor
- Sign Installation & Repair
- Solar Panel Installers
- Snow Plow
- Stone And Tile Installer
- Surety Bonds
- Swimming Pool Contractor
- Swimming Pool Service And Maintenance
- Tank Cleaners
- Tool Grinding And Repair
- Tree Surgeon
- Tree Trimming
- Upholstery Shop
- Waste Haulers & Garbage Collection
- Water Well Drilling
- Welding Contractor
- Wildlife & Pest Control
- Window Cleaning
- Specialty Contractors
The contracting industry is a field that involves a lot of risks, both for the contractor and for the clients they work for. This is why commercial insurance is so important for contractors. Insurance can protect contractors from a variety of potential losses, such as:
Liability: If a contractor causes damage to a client's property or if a client is injured while on a job site, the contractor could be held legally responsible. Liability insurance can cover legal fees and any settlements or judgments that may be awarded.
Property damage: Contractors often use a lot of expensive equipment and tools, and there is always a risk that this equipment could be damaged or stolen. Commercial property insurance can help cover the cost of replacing damaged or stolen equipment.
Business interruption: If a contractor is unable to work due to an unforeseen event, such as a natural disaster, insurance can help cover their lost income during this time.
Workers compensation: If a contractor or one of their employees is injured on the job, worker's comp can help cover medical expenses and lost wages.
Overall, commercial insurance is an important risk management tool for contractors. It can provide financial protection against a wide range of potential losses, helping contractors to stay in business and continue serving their clients.
Minimum recommended small business insurance coverage: Business Personal Property, Employee Dishonesty, Contractors' Equipment and Tools, General Liability, Employee Benefits Liability, Umbrella Liability, Automobile Liability and Physical Damage, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Building, Business Income with Extra Expense, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Accounts Receivable, Builders Risk, Computers, Goods in Transit, Installation Floater, Valuable Papers and Records, Cyber Liability, Employment-related Practicesand Stop Gap Liability.