Indemnity Insurance for Electrical Services Companies

If you own and operate any kind of business, you need insurance. An electrical services company is no exception, as insurance for electricians is essential. One small mistake can cause a client to have physical or financial damages, which can then cause big problems for you and your business. If you don't have the proper insurance coverage in place, it could be devastating and cause you to shut down, and maybe even file for bankruptcy. What if you install a product that ends up malfunctioning? Or, if you have employees that become injured or ill on the job? These things can end up costing your business a lot of time and money making it difficult to turn a profit. All of this can be avoided upfront by making the responsible investment in business insurance protection.

Before you can attempt to shop around for insurance for your electrical services business, it is essential that you understand the different types of insurance that are available. Doing the research can be a bit overwhelming, especially if you are a new business because you have enough to worry about. However, knowing the insurance policies that are available and what they cover can help avoid any potential detrimental losses to your business.

In the electrical services business, you may be providing consultant services, giving advice to customers or peers, or doing work to homes or businesses. Professional Indemnity insurance is a type of policy that is specific to your profession, that provides coverage for financial loss due to a mistake made by you. Regardless of how well trained you or your employees are, humans make mistakes. Even if you don't make a mistake and a past or present customer makes a claim that you did, you will have to defend yourself.

Professional Indemnity insurance will provide coverage for the actual settlement if one is wared, and defense costs. Defense costs are a huge reason to make sure you have this coverage because court costs and attorney's fees can be enough to bankrupt a business. A customer could also say that they didn't get the results they expected due to your work or advice. Regardless of the claim, you want to protect your business from this potential money pit.

Because your profession as an electrician can involve making a plan and providing specifications to a customer, there is risk involved if it is not done correctly and causes financial harm to the customer. Dealing with electricity can be harmful and therefore costly if something goes wrong. Something as simple as having too many wires in one spot or hooking up the wrong kind of wire can have catastrophic consequences. Your business will be protected if you are negligent, even if it was not intentional. As an electrical services contractor, maybe you are not consulting all the time and only on an incidental basis. Regardless, you should have Professional Indemnity insurance.

Let’s say you decide not to carry Professional Indemnity insurance and take the chance. One claim of negligence against an employee or your business can not only have catastrophic financial consequences if you don’t have an insurance policy but imagine the devastation if the word gets out. Especially if it turns out to be a claim in which someone was physically harmed because you accidentally made a mistake. Having a Professional Indemnity insurance policy in place will help to deter these monumental negative outcomes.

Professional Indemnity insurance, while vital to your business, is not the only insurance policy that you need for your electrician business.

• General Liability - Provides coverage for liability and medical bills associated with third-party bodily injury and property damage. If you damage a neighbors home while inspecting the property of a customer is an easy example of where this would come in to play. Also, if you have an office, and a customer trips over a box on the floor and is injured.
• Defective Workmanship - If your work is found to be faulty and causes bodily injury or property damage, Defective Workmanship will pay for the loss. Be aware that it will not pay for the actual work to be corrected or any products that were used.
• Workers Compensation - Employees are great when it comes to trying to scale your business, and you should protect them by having Workers Compensation. If they are hurt or become ill on the job, it will pay for medical bills and lost wages until they can get back to work. Besides, most states will require that you carry Workers Compensation if you have employees. Even if you don't, many general contractors will require you to have it if you bid on a job for them.
• Commercial Auto - You most likely use your vehicle to transport your tools and products from one job site to the other. If so, you need Commercial Auto insurance to cover your auto liability and physical damage to the vehicles. Additionally, you can add on hired and non-owned auto liability to cover your business auto liability for employees using their vehicles for work purposes.
• Commercial Umbrella - While it may seem like $1,000,000 in liability would be enough should a claim arise, you might be surprised at how quickly that money can disappear. This can be especially true if defense costs are within that limit. Because of this, there is an Umbrella, or Excess, insurance policy. It is an extra limit of liability that sits over the top of your General Liability, Auto Liability, and Employers’ Liability. It is usually used when the limit on the underlying policy is exhausted or there is a gap in coverage that can be picked up by the Umbrella.
• Employment Practices - If you have employees, Employment Practices Liability insurance is a must. With how common claims of harassment and wage discrimination have become, your business needs to be protected. It also provides coverage for claims of wrongful termination and discrimination issues.
• Cyber Liability - Do you store customer information in a database? How about taking payments electronically? In this day and age you probably do both, and if you are hacked or end up with a virus this can open up a whole can of worms if customer information is leaked. Not to mention your business’s reputation, which is often an additional coverage on a Cyber Liability policy that the company will help you avoid having to deal with.
• Business Interruption - Do you have a plan in place if something happens to your building, tools, or vehicle that will prevent you from operating your business for some time? What if you still have bills to pay and you have no way of bringing in any profits because you have to wait for your truck or building to be repaired? Business Interruption insurance can provide coverage for your lost income during the time you are unable to operate. This is a great way to keep positive relationships with your vendors, and keep key employees by still being able to pay them a salary. There is usually a waiting period which can vary from 24-72 hours, and is usually for a max of either 12, 18, or 24 months.

Of course, there is no set price for insurance policies when it comes to any business. The electrical service industry is no exception. There are several factors to keep in mind that the insurance company will consider when preparing a quote.

• Experience - How long have you been in business, or how long you have been in the electrical services industry will be considered.
• Size - If you are a sole proprietor, or you have 50 employees will surely impact the price of your insurance, as well as what policies you may need.
• History - If you have had claims in the past you may end up paying more than someone who has not, depending on the size and the severity of the claims.
• Coverage - Your coverage limits and deductibles will surely impact the prices. The more coverage you need the higher the premium. Conversely, the higher the deductible, the more money you can save.
• Bundle - General Liability and Property insurance can often be bundled into a Business Owner’s policy to save money.

As a business owner, you may look at insurance like just another expense. Instead, try to look at it as a necessary investment to protect your current and future profits. Without the proper protection, your business could be bankrupt or shut down with one claim depending on the severity of the allegations. No matter how much you try to mitigate risk, mistakes, and accidents happen. When you are ready to take the next step in protecting your business, or you want to make sure your business is already properly insured, contact us. We have a dedicated team of insurance advisors standing by to help you obtain what you need for your unique situation, hassle-free.