Insurance for Electricians and Electrical Contractors
Whether you are an experienced electrician or just starting out, having an electrical business is a rewarding way to earn a living and your services will be in demand. But you must make sure your business is protected with insurance for electricians and electrical contractors.
Electricians and electrical contractors need specific types of insurance to minimize the risks associated with their jobs. We take electricity for granted but electricians have one of the most dangerous jobs in construction.
According to the federal government, there were 23,821 electrical contractors and other wiring installation contractors in 2020. Though this number seems high, some places like Ontario are experiencing a trades worker shortage and the Ontario will offer free training and paid electricians' apprenticeships.
Commercial General Liability
Whether your electrical business is commercial, residential, or industrial, you need commercial general liability (CGL) coverage. It protects you from lawsuits that result from accidents on the job by covering costs associated with third-party property damage or third-party injury.
Here's an example of how commercial general liability insurance can help you:
You’re fixing a client’s home circuit breaker unit, but due to a malfunction, a fire starts and results in major damages. The client sues you for the damage to their property.
Your commercial general liability insurance policy may cover the costs of repairing the damaged home.
Electricians should have at least $1 million or $2 million in commercial liability insurance coverage. Most projects hiring electrical contractors will ask for proof of liability insurance.
Commercial auto insurance
Electrical contractors also need commercial insurance for their vehicles. Some small business owners mistakenly believe that they’ll be covered by their personal auto policies while using their vehicles for work. Commercial auto insurance is like personal auto insurance but covers work-related accidents. It covers your vehicle, the employee driving it, and any passengers. Your policy can also cover a rental car while yours is in the shop.
Errors and omissions insurance
Errors and omissions (E&O) insurance is a useful addition to your electrician’s insurance because even experienced electricians can make a honest mistake that leads to costly damages for a customer. Contractors’ E&O coverage protects small business owners from errors or omissions in their work that prevent contract specifications from being met.
Tools and equipment insurance
You may also want to consider adding tools and equipment coverage to your electrical contractor business insurance policy. This type of coverage protects your business property like tools, equipment, computers, office contents, and stock. It pays to repair or replace your tools and equipment if they are damaged or stolen.