Electrical Contractor Insurance: Cost & Coverages

What is Electrical Contractor Insurance?

Electrical Contractors face various hazards every day while performing their duties. These risks could result from mishaps such as incorrect wiring or faulty equipment, leading to property damage, injuries, or even deaths. To mitigate these dangers and fulfill legal obligations, many states must obtain electricians’ liability insurance for electrical contractors before beginning projects.

The following section lets us see what insurance coverage an electrical contractor needs, Electrician liability insurance. Or what does the insurance company offer general liability coverage?

We will also describe about Electrical contracting insurance, Electrical contractor insurance requirements with electrical contractor insurance cost

What Insurance Coverages Do Electrical Contractors Need?

When it comes to running a successful electrical contracting business, having comprehensive electrical contracting insurance coverage is vital.

Here are some essential types of insurance that electrical contractors commonly purchase (Types of electrical contractor insurance or Electrician insurance):

1. General Liability Insurance or General Liability Insurance for Electrical Contractors

It falls under the head of electrician liability insurance which protects you in case of bodily injury (workplace injuries) or property damage (office space) caused by your company’s actions or negligence when conducting business activities. Sometimes it is known as Electrical contractor public liability insurance.

It shall include medical bills, costs, lost wages, and payments, etc.

2. Product Completed Operations Liability

Talking more about insurance for electrician, Defective Product Liability Insurance covers faulty merchandise issues after installation or repair[3] periods. This policy extends to instances involving errors originating from work performed by the insured or authorized vendors under contract.

3. Building Damage or Installation Floater Insurance

This insurance for electrician, ensures physical damage coverage for materials, supplies, and completed installations at job sites until they become permanent fixtures upon completion.

4. Cyber Liability Insurance

This insurance for electrician, offers protection against losses from unauthorized network intrusions or computer attacks compromising sensitive customer information stored electronically.

Having adequate electrician liability insurance or general liability insurance for electrical contractors ensures the smooth continuity of business endeavors despite adverse circumstances arising throughout the project life cycle.

Additional Coverages Electricians Might Need

1. Workers’ Compensation Insurance

While talking about electrical contractor public liability insurance, Electricians perform dangerous tasks like working with live wires, power tools, ladders, scaffolds, and more, which elevate the chances of job site hazards leading to personnel injuries or sickness.

You can save a lot on medical payments and medical expenses as worker’s Comp insurance (Electrician insurance) pays for expenses associated with treating worker injuries suffered throughout employment or illness developed later due to occupational exposure to toxins while performing duties.

2. Hired & Non-Owned Auto Insurance

While performing electrical work, you understand the importance of protecting yourself against various risks involved in the trade. One crucial aspect to consider is hired and non-owned auto insurance for electrical contractors.

While you might have electrician liability insurance coverage for your car or vehicles belonging to your clients, there may still be loopholes that expose you to potential risk and financial losses. Here’s what you need to know:

3. Commercial Umbrella Insurance (Commercial Auto Insurance)

Commercial umbrella insurance acts as an additional layer of liability protection above and beyond basic policies such as general liability and workers’ compensation. It typically kicks in once primary coverages reach their limits or must be more sufficient to cover all costs associated with a claim.

4. Equipment Breakdown Protection

Equipment breakdown protection supplements traditional property casualty coverage in commercial insurance policies like multi-peril, commercial property, or commercial building policies.

Essentially, standalone or endorsement forms extend enhanced benefits explicitly tailored for specific industries like electrical contracting, facing unique exposures regularly subjected to harsh environments and demanding job site conditions.

5. Cybersecurity Risk Management

Defending digital vulnerabilities that may expose private data accessed via online platforms or cloud storage solutions.

6. Errors and omissions Insurance

As an electrical contractor, you know firsthand the importance of precision and attention to detail. Even small mistakes can lead to severe consequences for homeowners and businesses alike, making investing in proper safety precautions and training programs crucial.

But even with all the precautions in place, human error still exists – that’s why having Errors and Omissions (E&O) insurance as an electrical contractor is just as vital as General Liability and Workers’ Compensation policies.

7. Employment Practices Liability Business Insurance

Shields employer decisions against discrimination charges, wrongful termination, retaliation, or harassment suits filed by former or existing staff members.

8. Surety Bond

Last but not least for electrical contractor public liability insurance, Sureties bonds are agreements between three parties, typically an obligee, principal, and surety, guaranteeing the performance of a particular obligation. They often function like credit enhancements, ensuring financial losses and promising payment if promises aren’t honored according to stipulated terms agreed upon in prior arrangements.

Electrical Contractor Insurance Cost

Here are some of the most important ones you need to take note of as a business owner if you are into an electrician business and looking for general liability insurance for electrical contractors.

• Number of Employees
• Policy Limitations
• Previous Claims, History, etc.

Example: For a self-employed electrician operating without any employees or subcontractors, the general liability coverage may be somewhere around the annual rate of $300 to $500.

Also, for larger contractors that require additional coverage such as workers’ compensation, auto policies, and other insurances, these electrical contractor insurance costs can be doubled or more. Get our contractor invoice software to draft professional electrician invoices with automatic calculation.

Some Examples of Electrical Contractor Claims

1. House Fire (General Liability)

During the construction of a newly built custom home, an electrical contracting firm worked together with a home builder to install the electric systems within the residence. After successful testing of the installation, the builder signed off on the completed task, allowing the electricians to move on to other projects.

However, after just over a year since their work ended there, the dwelling caught on fire due to a fault in its electrical setup, leading to severe damage to the premises and injuries to occupants inside the homeowner’s family.

An instance like this would qualify as covered under a general liability policy. It pays for any injuries suffered by third-party individuals or damages done to external assets.

2. Employee Falling From (Ladder Workers Compensation)

In yet another situation, suppose an electrical installer fell from a ladder while installing fixtures in an upstairs room of a building structure. Due to losing their balance, the technician grabbed nearby objects in an attempt to regain stability and unfortunately fractured his dominant upper limb upon landing.

Eventually, he needed surgical intervention and several weeks of restoration before returning back to regular duty status as a certified electrician.

Workers’ compensation would handle such incidences wherein an individual connected with the organization ends up getting hurt during work hours.

Common Insurance Requirements For Electricians

There are several common insurance requirements that electricians should consider having in place to protect themselves and their businesses. Here are some of the electrical contractor insurance requirements:

• General Liability Insurance: This type of insurance provides protection against financial loss resulting from lawsuits filed by customers who allege damages, personal injury, or negligence associated with your work.
• Workers Compensation Insurance: As an electrician working independently or through an agency, you may need to purchase workers comp insurance to pay benefits to employees injured on the job or to their surviving dependents if a worker dies as a result of a job-related accident.
• Property Insurance: This type of insurance provides protection against damage to your tools, equipment, and materials while in transit or stored at a job site location.
• Commercial Auto Insurance: If you use vehicles for business purposes or transport tools and supplies to job sites, commercial auto insurance will help protect you financially in case of accidents or damages to your vehicle or others.

Conclusion

That’s it from our side when it comes to electrical contractor insurance. Hope You have got the required information here.

In conclusion, electrical contractors are critical in keeping our homes, offices, hospitals, schools, and other places running smoothly. However, unexpected incidents happen, making it essential for electricians to secure the right insurance coverage to meet their unique requirements.

FAQs