Electrical Contractor Insurance

Electrical contractor insurance is designed to protect professionals who design, install, and maintain electrical systems. This coverage can protect electrical contractors against a variety of costly risks, including liability claims, worker injuries, and damage to company vehicles. Some types of coverage are actually required by law before you can begin electrical contracting work.

Luckily, a local independent insurance agent can help you get equipped with the right electrical contractor insurance today. They know where to find quality electrical contractor insurance at a great rate. But first, here's a closer look at what electrical contractor insurance covers and when it's required.

What Is Electrical Contractor Insurance?

Electrical contractor insurance is a type of coverage tailored to meet the needs of these professionals that can protect against many types of loss, including theft or damage to tools used on the job, liability claims, and more. This coverage can pay to repair or replace damaged or stolen business property, cover the cost of lawsuits, and help contractors avoid penalties for not having the required insurance. Electrical contractor insurance is needed by professionals who work with any of the following:

• Active circuits
• Specialized equipment
• Live wires

Electrical contractors face many risks on the job, with the obvious being electrocution, injuries, and even death. Contractors who have employees working under them also need the proper coverage in case their workers are injured on the job. An independent insurance agent can help you get set up with all the appropriate electrical contractor coverage.

Is Electrical Contractor Insurance Required?

Yes, electrical contractor insurance is often required before you can obtain your license to practice this type of work professionally. Many states require aspiring contractors to provide proof of insurance before they obtain their license or begin practicing. Be sure to review electrical contractor licensing and insurance requirements by state before you begin working to avoid fines and other penalties. 

Beyond state legal requirements, electrical contractor insurance can be required on a per-contract basis. If you're hired by a private client to complete a job, they may require you to provide proof of insurance before you begin the project. Clients typically like to see proof of at least liability coverage and workers' comp, but may require you to have other types of insurance as well.

What Does Electrical Contractor Insurance Cover?

Electrical contractor insurance is a policy that covers many types of coverage, including liability, workers' comp, commercial vehicle, and more. These policies typically contain the following.

General liability insurance

General liability insurance covers third-party claims of bodily injury or personal property damage. Customer slip-and-fall injuries that occur on business premises are commonly covered claims. 

Workers' compensation insurance

Workers' comp covers costs associated with employee injury, illness, or death caused by the work environment or job duties. Coverage is often mandatory in most states for electrical contractors with at least one employee.

Commercial auto insurance

Commercial vehicle insurance covers vehicles used for business purposes, such as those that transport contractors and their tools between job sites. A personal auto insurance policy won't cover vehicles used for business purposes. This coverage can pay for theft or damage to company vehicles and cover liability claims after accidents.

Commercial property and tools coverage

Commercial property insurance can protect contractors' equipment, tools, and other materials needed for the job against theft, loss, damage, or destruction. Covered perils can include vandalism and fire damage. It typically includes on-site protection, but to have protection for materials while they're in transit, you may need additional inland marine insurance.

Professional liability insurance

Professional liability insurance, also known as errors and omissions insurance, covers design or workmanship errors that cause loss or harm to clients or customers. If you're completing a particularly high-risk project, such as installing the electrical system at a huge facility, this coverage can provide protection if you make a mistake that results in electrocution injuries, fire, or property damage to third parties.

Optional and specialized coverages for electricians

Depending on the nature of the projects you complete, you may require additional coverage, such as:

• Umbrella insurance: This provides additional liability protection beyond what's included in your other policies. Typically, umbrella insurance comes with liability coverage in increments of $1 million to help cover hefty lawsuits. 
• Cyber liability insurance: This covers lawsuits and other costs associated with data breaches, cyberattacks, and other digital threats that expose sensitive or private client data, such as personal information and credit card numbers.
• Surety bonds: Many states require contractors to be bonded before they can begin practicing. Surety bonds provide assurance to clients that a contractor will complete the project they were hired for.

An independent insurance agent can help you assemble a complete electrical contractor insurance package that contains all the coverage you need.

How Much Does Electrical Contractor Insurance Cost?

Electrical contractors pay an average of $684 per year, or approximately $57 per month, for general liability insurance alone. The cost of a complete policy with many types of coverage can be much higher than this, costing up to $7,176 per year or even more. Here are some average costs for various types of electrical contractor insurance:

An electrical contractor insurance policy with all the above types of coverage included would cost $7,176 per year, or approximately $598 per month. An independent insurance agent can help you find affordable electrical contractor insurance near you.

Factors That Influence Electrical Contractor Insurance Costs

Several factors can impact the cost of electrical contractor insurance, including the following:

• The size of your business or company
• Your annual revenue
• The types of projects you complete
• Your annual employee payroll
• Your location
• Your claims history
• The types and amount of coverage you choose

A local independent insurance agent can help you find inexpensive electrical contractor insurance and help you reduce your premiums even further with any business insurance discounts you qualify for. 

Electrical Contractor Insurance Coverage Comparison

Certificates of Insurance (COI) for Electrical Contractors

A certificate of insurance (COI) is a document that shows proof of insurance coverage. Clients or customers may require electrical contractors to provide a COI before they're hired for projects, as it helps ensure a job will be completed without the unnecessary risks that come with being uninsured. The COI proves that the contractor has coverage in case of an accident or mistake, depending on the types of coverage they have. An independent insurance agent can help you get a COI from your insurance company to provide for your clients. 

How to Choose the Right Electrical Contractor Insurance

There are four simple steps to choosing the right electrical contractor insurance:

1. Identify your risks: Consider all aspects of your contracting business and work that may require protection, such as company vehicles, employees, tools, and equipment.
2. Review state and client requirements: You'll need to ensure you get all the types of coverage required by your state and the clients you'll be working for, such as general or professional liability, workers' comp, etc.
3. Compare coverage options and request quotes: It's helpful to compare your electrical contractor insurance options from different insurance companies in your area to find the best rates and overall coverage.
4. Work with an independent insurance agent: A local agent can shop and compare electrical contractor insurance policies and quotes from multiple carriers for you to find the best deal. 

The entire process of shopping for the right electrical contractor insurance can be simplified down to one step if you choose to enlist the help of an independent insurance agent. These agents can evaluate your business's risks and state coverage requirements to find you all the necessary protection. 

An Independent Insurance Agent Can Help You Get the Right Electrical Contractor Insurance

When it's time to get your electrical contracting business set up with the right coverage, no one's better equipped to help than a local independent insurance agent. These agents have access to multiple commercial insurance companies in your area, and they know where to find the best electrical contractor coverage at a great rate. They'll get you matched to a policy that includes all the protection required for the job. And down the road, your agent can help you file business insurance claims or update your coverage when necessary. 

FAQs About Electrical Contractor Insurance