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:
- How Much Does Electrical Contracting Insurance Cost?
- What Type Of Insurance Do Electrical Contractors Need?
- Should I Buy Electrician Insurance?
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.
What Type Of Insurance Do Electrical Contractors Need?
The most common small business insurance policies electrical contractors carry are: general liability, commercial property, commercial auto, and workers' compensation. There are other specialty coverages available based on their specific operations.
Should I Buy Electrician Insurance?
As an electrical contractor, your trade is extremely important; however, it's also extremely hazardous. Faulty wires or improper connections can spark fires and cause electrocution. Climbing ladders and working in tight spaces could result in severe injuries. The tools and equipment that you work with are expensive and could be destroyed or stolen. The property that you operate your business out of could be damaged.
Given the inherent risks that are associated with your business, insurance coverage is absolutely vital; in fact, electrical contractors are legally required to carry certain types of policies. Having the right electrical contractors insurance policies will protect you from financial losses and ensures that you are compliant with the law.
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.
How Much Does Electrical Contractors Insurance Cost?
The cost of coverage depends varies and depends on a variety of factors. The type of business insurance policy, the size of your business, and your work history are just some of the factors that will affect the cost of insurance. However, regardless of how much coverage costs, insurance for electricians is one of the most important investments you can make for your business.
Electrical Contractor's 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.
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 ISO General Liability Code(s): 92478 Electrical Work - Within Buildings, 92451, 92446 Electric Light or Power Line Construction
- 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.
Types Of Small Business Insurance - Requirements & Regulations
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.
Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.
Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.
Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.
Small Business Insurance Information
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.
Types Of Small Business Insurance
Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:
- What type of business am I running?
- What are common risks associated with this industry?
- Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
- Does my state require me to carry this type of insurance?
- Does my lender or do any of my investors require me to carry this type of policy?
A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:
|Business Insurance Policy Type||What Is Covered?|
|General Liability Insurance||What is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.|
|Workers Compensation Insurance||What is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.|
|Product Liability Insurance||What is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.|
|Commercial Property Insurance||What is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.|
|Business Owners Policy (BOP)||What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.|
|Commercial Auto Insurance||What is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.|
|Commercial Umbrella Policies||What is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.|
|Liquor Liability Insurance||What is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.|
|Professional Liability (Errors & Omissions)||What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.|
|Surety Bond||What is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).|
Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.
Business Insurance Required by Law
If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.
Your insurance agent can help you check applicable state laws so you can bring your business into compliance.
Other Types Of Small Business Insurance
There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:
- Business Interruption Insurance
- Commercial Flood Insurance
- Contractor's Insurance
- Cyber Liability
- Data Breach
- Directors and Officers
- Employment Practices Liability
- Environmental or Pollution Liability
- Management Liability
- Sexual Misconduct Liability
Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.
Also learn about small business insurance requirements for general liability, business property, commercial auto & workers compensation including small business commercial insurance costs. Call us (855) 767-7828.
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.
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- Boiler Contractors
- Builders Risk
- Building Cleaning & Maintenance Services
- Cabinet Installer
- Cable And Satellite TV Installer
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- Cistern Contractors
- Contractor Liability
- Curtain Cleaners
- Deck Builders
- Door And Window Installers
- Dryer Vent Cleaning
- Drywall Contractor
- Electrical Contractors
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- Gutter Installation And Repair
- House Cleaning
- HVAC Contractor
- Insulation Contractor
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- Lawn Care
- Lawn Irrigation Sprinkler System Installation
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- Plastering And Stucco Contractor
- Pressure Washing Contractors
- Propane And Fuel Dealers
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- Septic Tank Cleaning
- Siding Contractor
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- Solar Panel Installers
- Snow Plow
- Stone And Tile Installer
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- Swimming Pool Contractor
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- Water Well Drilling
- Welding Contractor
- Wildlife & Pest Control
- Window Cleaning
A contractor that wants to begin or stay in business, liability coverage must be obtained for the premises or operations, off-site locations and products/completed operations exposures. These coverages may be included as a part of a businessowners policy (BOP) or purchased in a commercial general liability (CGL) policy. Owners and contractors protective liability and railroad protective liability coverages may also be required in certain cases in order for a contractor to obtain a particular job.
Physical damage coverage for tools, supplies and equipment, both on and off the contractor's premises, is a concern. Liability exposures at the premises of the contractor, and at the premises of the contractor's customer, must be properly addressed along with completed operations. Business insurance is very important as is workers compensation insurance protection for employees.
Contractors may work under a general contractor as a subcontractor in larger construction projects - like a new commercial site or residential subdivision. They can work on smaller projects directly with a home owner, usually specializing in renovations or remodels.
In business insurance speak, often called 'artisan contractors' or 'casual contractors', they are involved in many aspects of construction and contracting work – and include various trades and skills. Carpenters, painters, plumbers, electricians, roofers, tree trimmers, landscaping are just a few examples. They may do roofing, fencing, drywall, tile work and many other trades that involve skilled work with tools at the customer's premises.
An artisan contractor performs a single trade or job, and each has its own specialized liability needs with its own exposures to risk and accidents. Contractors liability insurance can offer coverage for bodily injury, property damage, advertising injury and medical payments.
Most artisan contractors should have commercial general liability at the very least, but many need broader coverages - like an umbrella to increase their limits of liability, inland marine policy to protect their tools, workers compensation if they have employees, and even commercial auto if they use vehicles for business purposes.
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.