Buy HVAC Contractor Insurance

HVAC contractor insurance is a type of insurance that is specifically designed for heating, ventilation, and air conditioning (HVAC) contractors. This type of insurance provides financial protection for HVAC contractors in the event of accidents, injuries, or property damage that may occur while they are working on a job.

It typically includes coverage for liability, property damage, and workers' compensation. HVAC contractor insurance is important for protecting the contractor's business and assets, as well as ensuring that they are able to continue operating if something goes wrong.

The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small HVAC contracting businesses ranges from $37 to $59 per month based on location, size, payroll, sales and experience.

HVAC contractors need insurance for a variety of reasons. The most important reason is to protect their business and financial assets. If a contractor is sued or faces a claim for damages, the cost of defending themselves and paying any settlements or judgments can be financially devastating without the proper insurance coverage.

Another reason HVAC contractors need insurance is to protect their customers. If a contractor causes damage to a customer's property or causes injury to someone while on the job, HVAC contractor insurance can cover the costs associated with those incidents.

This not only helps protect the contractor's business, but also helps ensure that their customers are taken care of and that the contractor is able to fulfill their obligations to their clients.

Additionally, many states require HVAC contractors to carry certain types of insurance in order to operate legally. Without the required coverage, contractors may face fines, penalties, or even the loss of their license.

In summary, HVAC contractors need insurance to protect their business, their customers, and to comply with legal requirements. Without insurance, contractors risk losing everything they have worked hard to build and could potentially face financial ruin.

There are several types of insurance policies HVAC contractors should carry, including the following:

• Commercial General Liability: At the bare minimum, an HVAC contractor should invest in a commercial general liability policy. This type of insurance safeguards you from third-party injuries, third-party property damage, installation and repair problems, and moisture damage, just to name a few things. For instance, if an employee damages a client's home or business while installing a ventilation system, you are responsible for the damages. A commercial general liability policy will cover the costs of those damages so that you don't have to end up paying for them out of your own pocket.
• Commercial Property: You should also consider carrying a commercial property insurance policy. This type of insurance covers the physical structure of your business, as well as the contents inside. For instance, if a tree crashes down on your business and damages the property, as well as equipment inside, a commercial property insurance policy will help pay the repairs to your building. It will also cover the replacement cost for the damaged equipment.
• Errors and Omissions: Also known as professional liability insurance, errors and omissions (E&O) insurance will protect you and your employees against any negligent claims that your clients may make. If you did not properly correct an issue with a cooling system and the customer's property was damaged as a result, he or she may decide to file a lawsuit against you, claiming negligence. Your professional liability policy would cover legal fees, including attorney and court fees, as well as any settlement that may be awarded.
• Workers Compensation: If you employ a staff, workers' compensation insurance is an absolute must. It covers your HVAC contracting business from liability that may be related to injuries and illnesses that affect your employees while they are working. If a piece of heavy equipment falls on a worker during the installation of a ventilation system and the employee sustained an injury, workers comp would cover the cost of medical care. It can also assist with missed wages while he or she is recovering.

Premises liability exposures at the contractor's office or shop are generally limited due to lack of public access. Retail sales increase the possibility of customers slipping, falling, or tripping. During installation at job sites, the electrical voltage must be turned off 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.

Unprotected welding can result in bodily injury or set the property of others on fire. The contractor's employees can cause damage to the client's other property or bodily injury to members of the household, the public, or employees of other contractors. Tools, power cords, and scrap all pose trip hazards even when not in use. If there is work at heights, falling tools, or supplies may cause damage and injury if dropped from ladders, scaffolding, cranes, or helicopters. Pressure-testing of boilers and other pressure vessels can result in explosions or fire.

Completed operations liability exposures can be severe due to improper wiring or grounding. When a heating unit malfunctions, the cause may be difficult to determine. Specialists may be required to determine whether it arose from improper operation and maintenance, faulty system design, faulty manufacture, or faulty installation. The absence of an aggressive quality control program that documents full compliance with all construction, material, and design specifications may indicate a morale hazard and make it impossible to defend against serious claims.

Hazards may increase in the absence of proper record keeping of work orders and change orders, as well as inspection and signed approval of finished work by the customer. Boiler work, LP gas units, and wood burning units have high products liability exposures. Improperly installed heating units pose potential injury to tenants and their customers within buildings due to exposure to carbon monoxide and other fumes or gases.

Environmental impairment exposures may arise if the contractor is responsible for the disposal of old insulation and the use, transportation, and disposal of fuels and related pollutants due to the potential for contaminating air, ground, or water supply. Old air conditioning equipment may contain PCBs. Proper written procedures and documentation of both the transportation and disposal process are important.

Workers compensation exposures vary based on the size and nature of the job. Both residential and commercial work involves lifting, work with hand tools, wiring, and piping. Cuts and puncture wounds from the fabrication and installation of sheet metal for ducts and vents, back injuries from lifting, such as hernias, strains, and sprains, electrical burns, slips and falls, foreign objects in the eye, and inhalation of fumes are common. Electrocution can occur from the use of high-voltage lines. Anytime work is done above ground, injury or death from falls and being struck by falling objects can occur.

Complications from the large, heavy machinery and their use, misuse, maintenance, and transport have unique hazards. Welding can cause eye damage and burns. If welding is done in confined spaces, proper ventilation and fire protection are essential to prevent injury to workers. In repair and reinstallation operations, workers may encounter lead dust or old insulation to be removed, some of which may include "friable" (easily crumbled) asbestos. Procedures must be in place to identify and handle this exposure.

Careful consideration must be given to the type of boilers, the fuel used, and the services the insured provides. Pressurized vessels present unique hazards with potentially severe losses.

Property exposures at the heating contractor's own location are generally limited to those of an office, shop, and storage of materials, equipment, and vehicles. Operations may include retail sales. Ignition sources include electrical wiring, heating, and air conditioning systems. If repair operations involving welding take place on premises, the exposure increases. Welding involves the use of tanks of gases that must be stored and handled properly to avoid loss.

The absence of basic controls such as chained storage in a cool area and the separation of welding from other operations may indicate a morale problem. Air conditioning and heating systems and their components may be targets for theft. Appropriate security controls should be taken including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.

Crime exposure is from employee dishonesty. Background checks should be conducted prior to hiring any employee. All orders, billing, and disbursements must be handled as separate duties and annual external audits conducted. All items should be physically inventoried on a regular basis to prevent theft. Thieves may target copper cable.

Inland marine exposures include accounts receivable if the contractor bills customers for services, computers, contractors' tools and equipment, including ladders and scaffolding, hoists, and portable welders, goods in transit, installation floater, and valuable papers and records for clients' and suppliers' information. If large or suspended heating units are lifted by cranes to rooftops for installation or dropped into place by helicopters, the units could be damaged from drops and falls.

Since an accident may trigger both the equipment and installation coverages, as well as possible third-party liability, many contractors prefer to hire a crane or helicopter with a licensed operator. Contractors may rent, lease, or borrow equipment from others or rent, lease or loan their owned equipment to others, which presents additional exposure as the operator may be unfamiliar with the operation of the borrowed item. Goods in transit consist of tools and equipment as well as products purchased by the customer for installation at the job site.

Heating units can be of high value and susceptible to damage in transit, frequently requiring expertise in loading to prevent load shift or overturn. If units to be installed are delivered to the site in advance, the contractor will need an installation floater. Hazards to machinery, tools, or building materials left at job sites include theft, vandalism, damage from wind and weather, and damage by employees of other contractors.

Commercial auto exposures are generally limited to transporting workers, equipment, and supplies to and from job sites. If vehicles are used to deliver the heating and air conditioning units, special modifications or built-in equipment such as lifts and hoists may be required. Large heating systems may be awkward and require special handling and tie-down procedures. Drivers should be properly trained to prevent overturn and to navigate through high traffic areas.

Serious property damage or injury to employees of other contractors, passing pedestrians, or motorists can arise during loading and unloading equipment and materials. All drivers must have appropriate licenses and acceptable MVRs. Vehicles must be maintained and the records kept in a central location.

HVAC contractors can be sued for various reasons, including:

• Property damage: If an HVAC contractor causes damage to a client's property while performing their work, the client may sue them for damages.
• Personal injury: If a client or their family member is injured on the job site, they may sue the HVAC contractor for negligence.
• Breach of contract: If an HVAC contractor fails to fulfill their obligations outlined in a contract with a client, the client may sue for breach of contract.
• Failure to obtain necessary permits: If an HVAC contractor fails to obtain the necessary permits for their work, they may be sued for damages or penalties by the local government.
• Faulty installations or repairs: If an HVAC contractor installs or repairs a system improperly, leading to malfunction, property damage, or personal injury, they may be sued for negligence or faulty workmanship.

Insurance can protect HVAC contractors from such lawsuits in different ways, depending on the type of coverage they have. Some examples are:

General liability insurance: This type of insurance covers HVAC contractors against property damage, personal injury, or other third-party claims that arise during their work. If a contractor is sued for any of these reasons, their general liability insurance can help pay for legal fees, settlements, or judgments.

Professional liability insurance: Also known as errors and omissions insurance, this type of coverage protects HVAC contractors from claims of negligence or faulty workmanship. If a client sues a contractor for a mistake or omission that causes damages, their professional liability insurance can help pay for legal defense, settlements, or judgments.

Workers' compensation insurance: If an HVAC contractor's employee is injured on the job, workers' compensation insurance can pay for their medical expenses, lost wages, and other related costs. This coverage also protects the contractor from being sued by their employee for workplace injuries.

Commercial auto insurance: If an HVAC contractor's vehicle is involved in an accident while on the job, commercial auto insurance can pay for damages to the vehicle, other property, or people involved. This coverage can also help cover legal fees and judgments if the contractor is sued for negligence in the accident.

It's important for HVAC contractors to have proper insurance coverage to protect themselves from potential lawsuits and financial damages. Without adequate insurance, they may have to pay for legal fees, settlements, or judgments out of their own pocket, which can be costly and devastating to their business. By obtaining the right insurance coverage, HVAC contractors can have peace of mind knowing they are protected against potential risks and liabilities.