What Insurance Does an Electrician Need?
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As an electrician, you probably find yourself in many shocking situations (ahem, pun intended). Electrical work is dangerous and demanding. You are the person people call when they need new wiring installed, general electrical repairs, or maintenance completed. It doesn’t matter what your specialty is or the services you offer, it just matters that you are prepared and ready to go when the customer needs an electrician.
Being prepared starts before you are on the job. Protecting your electrician business with a commercial insurance policy will give you peace of mind. There are many commercial insurance options available for an electrician—but it can be hard to know where to start. That's why we're here to offer our expertise and provide a comprehensive guide to electrician insurance. We want to help you make educated and money-saving decisions for your electrical business that will help you protect yourself from the common risks you face. Electrical contractor insurance costs can be affordable. Let us help you get a quote for your company!
NOTE: Your state law may require you to carry insurance coverage. Check with your state licensing board. Licensed insurance agents can also help you determine a particular state's insurance requirements.
So what types of business insurance coverage should electricians consider?
A General Liability Insurance policy protects business owners if a claim is brought against you by customers for third-party bodily injury, third-party property damage, or advertising injury. An electrician liability insurance policy allows you to protect your customers without your company getting caught in the cross-hairs.
Example: Faulty wiring in electrical systems can cause a fire in a client's home. Unfortunately, one of your electricians handled a job where this occurred. The client holds you responsible. the client sues your small business. Unfortunately, any attorney can choose to go after your personal assets, especially when seeking a large award for damages. This is why it is important to have the proper amount of electrician liability insurance in place. It can cover the cost to repair the damage and any settlement that you’re liable for.
Some general liability policies include product liability endorsements, which will protect your business in the event of a lawsuit claiming damages as a result of the work you or your company performed.
Commercial property insurance covers your office building, furniture, business equipment, and warehouse space—whether leased or owned—from physical damage. Property damage caused by a fire, storm, theft, or vandalism is usually covered. The financial losses from storm damage can be devastating, which is why this policy is so important.
Most electrical contractors also own an expensive array of tools and equipment which can be damaged, lost, or stolen. Make sure your property coverage has a clause in place to cover tools and equipment. If it doesn’t, consider purchasing inland marine insurance. This covers expensive tools and equipment while stored, in transit, or being used on a job site.
We advise small business owners to look into a Business Owners Policy (BOP). A BOP is typically a bundled package of commercial general liability coverage, commercial property coverage, and business interruption insurance (or Business Income Coverage) that insurance companies offer at a discounted rate. Business interruption sounds like its name—it provides you coverage if your business is damaged or you’re unable to operate.
It can cover payroll, taxes, lost profits, and the cost of a temporary location. A BOP is often more affordable than purchasing each policy separately and can be a great option to provide small businesses with the coverage they need. Some insurance companies will include other policies to build customized coverage.
If you use personal vehicles or work vehicles driving to and from jobs, you need commercial auto insurance as part of your business policy. Your insurance company will not cover injury or property damage if you were working when the accident occurred. Make sure the commercial auto policy includes a “Hired and Non-Owned” policy if you use a vehicle that’s borrowed or loaned to you.
Do you have employees or other electricians working under you? Workers' compensation insurance is required in most states and is geared toward protecting your employees. How? Workers' comp insurance provides coverage for medical bills and lost wages for any employee that suffered a work-related injury. It also helps protect you as the small business owner from being sued for the bodily injury if an employee is injured. Check with your licensed insurance agent and the state department of insurance for your state’s specific requirements.
Example: An electrical contractor is rewiring an electrical panel for a customer. They are having a particularly stressful day and forget to flip the breaker off. Your contractor comes into contact with a live wire and gets electrocuted. Luckily, the homeowner is in the room and calls an ambulance. Your employee is fine, but he's out of work for a few weeks. Workers' compensation insurance covers his medical payments and lost wages while he's recovering.
Another employee-related policy that you should consider is Employee Benefits Liability Coverage. This protects your business if you accidentally make errors in the administration of their benefit plan.
Employment Practices Liability Insurance protects you if an employee claims that you discriminated against them, harassed them, or that they were wrongfully terminated. If you're sued, your insurance company will provide you a lawyer and cover your legal costs.
Here are a couple of other policies that are often recommended as part of electrical contractors insurance:
Commercial Umbrella Insurance: You may also want to discuss a commercial umbrella policy to further protect your business. It can add higher limits to policies that are maxed out or don't afford enough coverage. If you exceed the limit of an underlying policy, this can keep your business running.
Professional Liability Insurance: Professional liability insurance—also known as errors and omissions insurance—protects electricians against negligence, civil suits, and professional mistakes that they may have made. If you're sued by a client, your insurance company can help pay your legal fees and settlements.
The type of insurance an electrical contractor business needs varies, so be sure to talk through your concerns with a knowledgeable agent.
The cost of electrician insurance can be affordable. An insurance company can offer payment plans for general liability insurance for monthly payments as low as $29–$45 per month. Contractors Liability points out that an entire annual premium can vary from $833 to $1,318 a year for a $1 million per claim/$2 million aggregate policy. But many things impact insurance premiums for electrical contractor liability insurance, including:
You can work with an insurance agency to put together a comprehensive business insurance package for your electrical contractors' business.
Whether you're looking for general liability insurance, property insurance, or specialized insurance for electricians, our goal at Tivly is to help you get the best small business insurance for your company. You can simply complete the form at the top of the page or you can call us at 877-907-5267 for a free quote. One of our agents will gladly help you get the electrician business insurance you need.
| Additional Insured Included: | YES |
| Free Certificates: | YES |
| Payment Options: | YES (Pay in Full OR Payment Plans) |
| Low Down Payments: | YES (Flexible Payment Options) |
| Coverage Limit Minimum: | $2,000,000 / $2,000,000 / $1,000,000 |
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