Insurance for HVAC Businesses: What You Need to Know
Running an HVAC business comes with risks from equipment damage to customer disputes. Is your HVAC business insured against lawsuits, theft, and mishaps?
This guide explains what business insurance that heating, ventilation, and air conditioning contractors need and answers common questions business owners often ask.
Western Financial Group, a 100% Canadian company, can help you navigate business, car, and home insurance during this period of economic uncertainty.
Why HVAC contractors need business insurance
HVAC professionals often work in high-risk environments: rooftops, mechanical rooms, crawl spaces, and customer homes. Mistakes, accidents, or unforeseen events can lead to lawsuits or major expenses.
Business insurance helps:
- Protect your company financially from claims or lawsuits
- Comply with licensing and regulatory requirements
- Provide peace of mind for both you and your clients
- Cover your tools, equipment, and vehicles
Key types of insurance for HVAC businesses
Commercial general liability (CGL) insurance
CGL insurance protects your HVAC business if a third party (customer/client) suffers bodily injury or property damage due to your work. For example, if a technician accidentally damages a client’s property, this insurance covers repair costs and legal fees.
Typical coverage:
- Property damage
- Bodily injury
- Personal and advertising injury
- Legal defense costs
Commercial property insurance
Commercial property insurance can help keep you protected from property losses, such as theft or vandalism. You can also add earthquake insurance, sewer backup, or flood coverage extensions.
You’ll need to do an inventory of all your business property to determine how much commercial property insurance you will need. Your Western business insurance expert can help you with this.
Commercial property insurance also protects your HVAC business office and its contents.
Property you may need to insure:
- Buildings and other structures
- Furniture, equipment, supplies
- Inventory, computers
- Documents such as payroll, accounts receivable
How can small business owners save on their insurance with Western?
Western helps business owners save on their insurance with the following:
- Bundle and save: They’re generally available when you bundle liability, commercial auto, and property insurance.
- Multiple quotes to suit your needs: Western is a national insurance broker that partners with Canada’s leading insurers. We’ll get you multiple business insurance quotes to suit your needs and to help you save money.
- Cost: Depends on factors such as services provided, location and size, deductibles, revenue, and any past claims
Commercial auto insurance
It covers your work vehicles if they’re involved in an accident. Personal auto insurance does not cover vehicles used for business purposes.
Covers:
- Company vans/trucks
- Liability and collision
- Medical payments
- Uninsured motorists
Professional liability insurance
It’s also known as Errors and Omissions (E&O) insurance. This type of insurance provides financial protection and covers legal fees and judgments if a dissatisfied client sues your HVAC company for the following:
- Work errors and errors in design
- Incomplete work or failure to fulfill the job contract
- Misrepresentation of services or skills
- Violation of good faith and fair dealing
- Inaccurate advice given to customers
- Alleged or actual negligence
Professional liability insurance limits coverage to owners and employees and they do not cover work done by subcontractors. It also does not cover non-financial losses or losses caused by intentional or dishonest acts.
E & O insurance pays for any damages related to your work or the job site after your HVAC company finishes the work and which results from your negligence, errors, or omissions. It does not cover work that’s in progress or damages already covered under your general liability policy.
Tools and equipment insurance
This type of insurance is also known as HVAC equipment insurance. It protects your business’s tools and equipment. If your tools or equipment are stolen, lost, or damaged, this policy may cover the repair or replacement costs.
Anything valued at less than $1,500 is considered a tool and anything above that limit is considered equipment.
Business interruption insurance
This coverage supports you when your HVAC business can’t operate due to a covered loss.
There are a number of losses that can force your HVAC business to shut down. Some examples include:
- Damage to your equipment from fire or vandalism
- A major reduction in revenue due to a client/supplier facing losses of their own
- A disruption in your supply chain
Business interruption insurance can help with expenses such as:
- Payroll
- Rent
- Utilities
- Property taxes
- Alarm monitoring
- Relocation of your business
Let Western Financial Group help you protect your small business with commercial insurance
In conclusion
As an HVAC contractor, your business insurance needs to protect you from the daily risks that you can face. HVAC insurance helps protects you from financial loss due to lawsuits and third-party accidents. Is that coverage you can afford to skip?
FAQs About HVAC Business Insurance
How Much Does HVAC Insurance Cost?
The cost of HVAC insurance varies depending on factors such as:
- Business size and revenue
- Number of employees
- Claims history
- Coverage limits
- Equipment value
- Regulations
Average range: $1,200 to $3,500 annually for small to mid-sized HVAC businesses. More complex operations with fleets or multiple locations may pay more.
Is insurance required to operate an HVAC business?
It’s expected that HVAC contractors will carry at least general liability insurance.
What happens if I don’t have insurance?
Without insurance, you’re personally liable for accidents, injuries, or property damage caused by your work. This can result in fines, lawsuits, or even the loss of your business license.
What if I work as a subcontractor, do I still need insurance?
Yes, you do. Even as a subcontractor, you can be held liable for damage or injuries. Plus, many general contractors require proof of insurance before hiring subcontractors.
How can I lower my insurance premiums?
- Maintain a clean claims history
- Invest in safety training and protocols
- Bundle policies (e.g., with a BOP)
- Raise your deductibles
- Shop around and compare quotes or contact Western Financial Group.
