Electricians are exposed to significant and often unique hazards when providing services related to the electrical systems in home, business and industrial settings. Electrical shocks, fires, explosions or other accidents on the job can happen when working with live wires, circuits, and electrical equipment. Electricians face risk of bodily injury and damage to their vehicles, equipment and property. Potential claims of negligent work or damage to customer property are also significant risks.
It’s crucial for electrical contractors to have adequate insurance coverage to protect their businesses, employees and equipment.
Coverages for unique risks
Some of the insurance coverage recommendations for electricians are similar to those of other general contracting and construction businesses. However, because of their unique risk exposures, some electricians may need more specialized coverage or policies, especially if they work in specialty areas such as marine or industrial settings.
Insurance requirements for electrical contractors vary state by state. Most states require licensed electrical contractors to carry at a minimum both liability and workers’ compensation insurance. However, minimum state requirements can be insufficient protection for a business. Your Wizdom One agent is a trained professional who understands the requirements of your state and can evaluate your unique needs.
Policies that are often recommended for electricians include:
Commercial general liability provides legal liability protection from losses due to bodily injury to third parties on a job site, property damage to someone else’s property, or lawsuits filed against your business. This would also cover damages in case a customer is injured at your business office.
Contractors errors and omissions (E&O) insurance coversdamage to your completed work due to unintentional faulty work, omission, or negligence. This coverage fills the gap of what isn’t covered by commercial general liability, which does not cover the value of your work.
Commercial property is coverage for the property and equipment owned by your business, including a leased or owned building where the business operates. This policy can also cover losses for business office furniture or other office equipment.
Commercial vehicle insurance, also known as commercial auto insurance, covers both physical damage and liability for automobiles, trucks, cargo vans or other vehicles used for business purposes. Policies may vary depending on how many commercial vehicles or what types of vehicles your business owns.
Businessowners policy (BOP) is a package of standard policies designed for small businesses — usually general liability, commercial property, and business interruption insurance. Some carriers provide additional coverages tailored for your specific electrical contracting business.
Workers’ compensation covers your employees if they are injured on the job or contract a work-related illness. Workers’ compensation insurance is generally required for all electrical contractors.
Business interruption insurance, also known as business income insurance, covers lost income should your business have to shut down due to losses such as theft, fire damage, wind damage, or if your business cannot operate due to damaged equipment or another loss or event. It also covers business expenses while the business cannot operate.
Also often recommended for electrical contractors are commercial umbrella liability, equipment floaters and business crime policies. Coverage limits may vary depending on your state’s requirements, the services your business provides, or the types of customers you serve.
The cost of each type of insurance coverage depends on a variety of factors, including how you operate your business. Some factors are how many employees you have, how many vehicles your business operates, the value of the equipment owned, or the number of previous insurance claims filed against your company.
Your agent can work with you to uncover the unique risks your business faces and design an insurance program that properly fits your budget and coverage needs.