If you work as an electrical contractor, then you know how dangerous electrical work can be. You also may or may not be aware of how important it is to hold electrical contractor insurance.
Electrical contractor insurance is designed to protect not only yourself, but also the company you work for, as well as the client. There are many different types of electrical contractor insurance, but most types fit under the umbrella of electrical contractor liability insurance.
Essentially, this insurance is to protect against negligent work and any injuries that occur generally while on the job working as an electrical contractor.
You most likely know that electricians not only run the risk of being electrocuted, but electricians also often work in spaces that can cause fires which will in turn damage property.
Whether it is damage to your own body or the property that you are working on, electrical contractor insurance is incredibly important to keep yourself protected. Depending on which state you live in, electrician insurance can be mandatory. This varies on state and local laws but is almost always mandatory in metropolitan cities.
Depending on where you operate or work as an electrician, the requirements will vary from state to state. Not only will the requirements vary regarding insurance, but they also vary regarding whether or not you even need a license to operate.
For example, in California, you must have a license, but before you apply, you must hold at least four years of experience at a journeyman level in order to bid on any projects worth $500 or more. On the other hand, in Illinois, no state licensing is required, but all licensing is done at the municipal level. This means that where you perform your job determines the licensing you require.
Despite different regulations for all states regarding licensing, most states do come together regarding one insurance requirement, and that is Worker’s Compensation insurance. This insurance covers medical diagnoses for employees who are injured on the job, as well as covers employee’s medical treatment or income losses.
When working as an electrical contractor, there are a few typical insurance needs. These will protect you in the event of damage that could happen to the property you are working on, injuries to you or other personnel, or even if theft occurs.
Most businesses hold General Liability coverage, and that is because it covers any injuries to third parties on the job site. General Liability also covers damage to client property. This type of insurance is limited, and it typically does not pay for work that is lost in an accident.
Professional Indemnity insurance for electrical contractors is extremely important. This type of insurance is usually reserved for professionals who give advice or offer professional services to any other business.
This type of insurance will cover you if you accidentally supply poor advice. Specifically, this insurance will cover financial loss by a client due to your advice.
Commercial Property insurance is coverage for if you work out of an office space or job site. There are customizable options in which you can purchase coverage for tools and equipment as well.
As stated earlier, Worker’s Compensation insurance is generally purchased and used by businesses to protect your employees if they become injured or sick at work. Worker’s Compensation insurance will pay the number of benefits that are required in your state. It is typically mandatory to hold this form of insurance.
If you plan to be driving a commercial vehicle, or even if you plan to hire an employee to do so, then you will need Commercial Auto insurance. This insurance covers you for damage to company vehicles caused by road accidents, theft, damage, or vandalism.
Most of the time an electrical contractor’s insurance company will offer you a package deal for the coverage you are looking for. The cost of these packages varies depending on a few factors:
If you happen to be a one-man show in the countryside of Montana, you will most likely be spending a few hundred dollars per year. If you are looking to insure a huge electrical contracting company in Los Angeles then you might be looking at upwards of $700,000. On average, you should expect to pay under $5,000 annually. The reason the cost is somewhat expensive is due to the risks that are involved with electrical work.
If you are looking to save money on insurance, the best way to do so is to purchase a business owner’s policy. This policy bundles General Liability insurance along with Commercial Property insurance. The catch is that you typically get both at a very discounted rate, and are able to protect your property and other risks at the same time.
Comparing policies from multiple insurance companies is also a great way to make sure you get the best coverage for the best price. Whether you are working with an insurance agent, or shopping around on your own, always look at quotes from multiple insurance companies to ensure you’re getting a deal that’s right for you.
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