Electrical contractors’ insurance. It neutralizes risk. Because make a mistake, or cause an accident, in your line of work and sparks will fly.
Legal claims are expensive and, with your reputation on the line, they can even cost you a client or two. So, what kind of business insurance do you need and what does it cover? Here’s a handy guide.
What types of insurance do electricians need?
Whether you run a small electrical business, you’re a self-employed contractor, or an electrical sub-contractor, some policies are essential:
• General liability insurance
• Professional liability insurance (E&O)
• Workers’ compensation insurance (if you employ anyone)
And others which are good to have:
• Equipment insurance
• Cyber insurance
General liability insurance for electricians
Do you work for clients on-site? Do customers visit with you at your premises?
If the answer’s yes to either of these questions, you need general liability insurance. Because no matter how careful you are, accidents happen.
What if a client trips over your toolbox, breaks an arm, and needs hospital treatment? Or when re-wiring a customer’s home, you accidentally knock over a priceless lamp, smashing it to pieces? Or one of your crew is overheard making some not-so-nice remark about a client, it gets back to them and they sue?
You’ll have to find the cash to cover the costs. Including paying damages if the case goes to court and you’re found at fault.
Not if you have general liability insurance for electrical contractors. It protects your business from the cost of claims for:
• Injury to someone (other than you or an employee)
• Damage to someone’s property
• Personal injury (slander/libel).
It can cover medical bills, repairs or replacement costs, legal fees, and compensation too. Even if there are no grounds for the case.
Professional liability insurance (E&O) for electricians
Do you charge clients for your electrical services?
Then you need professional liability insurance (or errors and omissions as it’s also known). It protects your business from the cost of faulty workmanship claims. And those kinds of legal claims aren’t covered by your general liability policy.
Say you were hired to install a new lighting system in an office building. Several months later, the client complains the lights aren’t working properly. After several attempts to fix the problem, the client’s still not happy. She claims your crew failed to install the switches correctly and used sub-standard components. She then hires another firm to correct the mistake and sues you, saying your work was at fault.
Now, after several attempts to fix the issue, you’re already out of pocket. A lawsuit’s going to cost you even more. You’re looking at legal fees, court costs, and compensation, too, if you’re found at fault.
If a client claims you made a mistake, or your work was faulty, professional liability insurance can pay your legal fees and compensation. Even if there are no grounds for the claim. And as you can be sued whether you made a mistake or not, it’s a handy tool to have at your disposal.
Workers’ compensation insurance
Workers’ comp insurance is a requirement in most states. Even if you only have one employee. As penalties can be severe, it’s best to check your state’s requirements.
It’s a good policy to have anyways. It protects you from the cost of workplace injuries, which can be extremely painful for a small business owner. And in your line of work, accidents are a daily hazard.
If one of your employees is injured, needs medical treatment and time off to recover, workers’ comp insurance can cover medical bills and lost earnings. What’s more, if the case goes to court, no matter who’s at fault, it’ll protect you from the costs involved in a lawsuit.
OK. So now we’ve covered the essential coverage you need, what about those nice-to-haves?
Do you own your electrical tools and equipment? Do you take them with you to jobs and use them on-site? We’re guessing the answer’s yes.
Think about protecting them with business personal property insurance. Because let’s face it, your tools are more likely to get lost, stolen, or damaged when you’re out and about. And while you’re trying to find the money to replace them, how will you work? You might even lose a client in the meantime.
Business personal property insurance protects your portable equipment from loss, theft, or damage – including mobiles and laptops. It covers anything moveable in your home office too. From your desk chair to your potted plants. Handy huh? Add it to your general liability policy for a little extra peace of mind.
Use email? Own a website? Transfer money online, maybe to suppliers?
If the answer’s yes to any of these questions, you should think about buying cyber insurance. Because cybercriminals are getting smarter.
Nowadays, it’s not just a case of hackers holding your website to ransom. Email and money transfer fraud are on the up. And as a small business with less cash for tough cyber defenses, you’re an easy target.
Cyber insurance doesn’t just provide the financial support to recover from an attack, you’ll also get 24/7 technical support to deal with it. So you’re back on your feet and in business again fast.
Electrical contractors’ insurance cost
The price you’ll pay for your insurance varies from business to business. It depends on factors like:
• the size of your firm
• where you’re based
• the limits you choose.
But there are ways you can save money. If you choose to pay a bigger deductible (the amount you’ll contribute if there’s a claim) your premium will be lower. Just be sure you can actually pay that amount if it comes to it.
As for how much cover you’ll need, it’s always best to over-estimate. Think worst-case scenario then pick a figure you can afford.
Our general liability policies cost from $42 a month; professional liability policies start from $71 a month. But if monthly installments don’t work for you, you can pay in one lump sum, or every quarter. Choose a payment plan that suits you.
Electrical business insurance quotes
Still not sure what insurance you need? You’ll find more information on electricians’ insurance over on our website.
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Or call us at 978.344.4215. We’ll talk you through your options and get you the right coverage for your business, fast.
Ready to get your quote? Quote online now.