What is HVAC contractor insurance?
HVAC contractor insurance has a bundle of policies. This coverage helps you save money for events where you or your business can be held responsible for injuring a third party or causing damage to their property.
Do HVAC contractors need insurance?
Contractors, involved in installing, maintaining, and repairing HVAC models, may purchase an HVAC insurance policy and save themselves from unwanted financial burdens. You receive coverage for handling a lawsuit, safeguarding your employees, and maintaining tools and equipment used in your projects.
The services covered by HVAC insurance include, but are not limited to, cleaning air ducts, water heating, installation of gas lines, repair or installation of a furnace, and installation of a boiler.
What insurance do HVAC contractors need?
Here are the common insurance policies HVAC contractors take out and you should consider, depending on the nature and size of your business:
General liability insurance
Many contractors invest in this type of policy as it protects them from property damages and injuries. For example, your client accidentally tripped over the equipment and sues you for injuries. Another example is while you’re fixing a client’s air conditioner unit, an electrical issue causes a fire which causes property damages. In both cases, general liability insurance will cover you.
Worker’s compensation
You can consider buying worker’s compensation insurance to offer a sense of protection to your employees. If they get injured onsite, it will cover their medical and payroll expenses. In most states, if you have employees, it’s required by law to have workers’ compensation insurance.
Business equipment insurance
HVAC contractors spend massive amounts in buying and maintaining tools and equipment. And if they get stolen or stop working all of a sudden, your business may lose many potential customers. To avoid this situation, you may prefer to get your expensive equipment and tools insured.
Professional liability insurance
This policy also referred to as errors and omissions insurance offers protection to your business against legal cases. This means if a client sues you for unsatisfactory work, you’ll be covered for your attorney expenses and any other monetary losses in case the final decision of the court is not in your favor.
Surety bond
Surety bond involves three parts in the contract: the principal (the contractor), the obligee (the customer), and the surety. If you’re unable to complete a big project for a client, your surety provider will work on your behalf and ensure that your customer recovers the losses. In this case, your customer’s financial interests stay protected, and you don’t have to worry about paying them from your own pocket.
What are the limits of HVAC contractor insurance?
You need to ensure that you are covered against risks and unpleasant incidents every time.
For small and mid-sized businesses, the coverage limit of $1 million should be sufficient, while for large companies, it may vary between $2 million to $3 million.
How much does HVAC contractor insurance cost?
The cost of an HVAC insurance coverage is based on these factors (but not limited to):
- Number of projects
- Number of employees
- Location of your business
- Iinsurance policies bought
- Claims history
A typical commercial general liability insurance begins at $400 to $550 annually for a coverage limit of $2 million.
How to choose the best HVAC contractor insurance
You can select the best HVAC contractor based on the following factors:
- Needs: No business organization works in the same way. While looking for reliable HVAC contractor insurance, you may want to ascertain your specific requirements and see if your prospective provider can confidently meet them.
- Cost: When you compare different insurance providers, one of the parameters that’ll act as a deal-maker or breaker is the cost. After all, nobody would wants to overpay for receiving the same benefits of an insurance policy. So, choose the provider that promises to give you more services at a reasonable rate.
- Exclusions: It’s essential to ask your insurance service provider beforehand about the exclusions in the policy. Since this may vary from one insurer to another, it’s a good practice to know about what they offer and what they don’t in the policy.
- Experience: An insurance company that’s been in the industry for a longer time period may have more expertise and knowledge than a company that’s just launched. So, prioritize knowing about the number of years the company has been in the market and how they have helped other HVAC contractors in having peace of mind.