We provide solutions to Electrical Contractors seeking Insurance Coverage for your Texas Electrician Contractor Business!
Electricians Exposures
As an electrician, you know how dangerous electrical work can be. It’s serious business when 220 volts are coursing through a wire and you’re the one installing a switch box or breaker. Not only can someone be electrocuted, but faulty wiring can lead to shorts and fires.
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If you’re a self-employed electrician or own an electrical contracting firm, you need insurance to defend against claims and protect your business.
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Property and liability coverage are the essential types of insurance you should have for your firm, along with a workers’ compensation policy if you have employees.
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Before you get started, increase your chances of getting good coverage and lower rates by taking a few proactive steps:
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- Make sure you are properly licensed and bonded.
- Stay up to date on the certifications you need to do your line of work.
- Read up on and implement best practices as prescribed by the National Electrical Contractors Association and the Independent Electrical Contractors. These groups provide education and training resources for electricians and have developed industry workmanship and installation standards.
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The more you can do to reduce your exposure to risk, the fewer insurance claims you’ll have and the lower your premiums will be.
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Take the time to review your Occupational Safety and Health Administration (OSHA) requirements and any applicable local laws. Remaining in compliance will help you get the best insurance rates possible.
Liability coverage is a must...
Commercial general liability (CGL) coverage should be at the top of your insurance checklist. You may need CGL insurance to get licensed, and most general contractors and project owners will require it as a condition of doing business with them. In addition, you may need proof of CGL coverage to obtain a loan, rent space or establish a line of credit.
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Without CGL insurance, your business could face potentially crippling claims if you’re sued and/or have to pay a big settlement. Because electrical accidents can be deadly or lead to extensive property damage, this coverage is essential. An insurance professional can explain the ins and outs of CGL and help you choose a policy.
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CGL covers you against claims for property damage and bodily or personal injury for which you are alleged to be at fault. For example, if wiring you installed sparks an electrical fire, you could be held responsible. Your CGL policy would help pay your legal fees and any judgment or settlement.
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You would also be covered if someone is injured on your premises or job site – for example, if someone were to trip over your equipment or tools, or fall off a ladder you left up. CGL covers you against personal injury, too, such as libel or slander, copyright infringement, misleading advertising or use of another’s intellectual property.
CGL coverage is sold with varied limits, depending on your risk and the size of your business. A policy with a $1 million limit would pay up to $1 million in legal expenses and damages during the period of coverage (usually one year).
However, a CGL policy wouldn’t cover bodily injury to one of your employees. That would be covered by your workers’ compensation insurance. In addition, CGL doesn’t cover professional liability or employment practices liability claims. For those, you need separate policies.
- Professional liability insurance covers bodily injury and property damage due to professional negligence. If you’re involved in the design of electrical systems or employ an engineer, you should get this coverage.
- Employment practices liability insurance protects you from employment-related claims such as discrimination, wrongful termination, sexual harassment or retaliation.
Commercial auto and property insurance
Whether you’re a sole proprietor or have a large contracting company, you’ll need commercial auto insurance for your vehicles. Even if you have only one truck, you won’t be able to insure it through your personal auto policy if it’s owned by your company and used for business. A commercial policy will allow you to name your employees as additional insureds so they can drive your vehicles.
Like personal auto insurance, commercial auto insurance covers bodily injury, property damage and accidents involving uninsured/underinsured motorists. Commercial auto insurance usually has higher limits and will cover trucks and vans.
You’ll also need commercial property insurance to protect any business property you own, such as buildings, computers, office equipment and supplies, tools and other material you use for your work. Most commercial property policies only insure only items located at a fixed business address. You may need to purchase a separate inland marine policy to cover the tools and material you transport to a customer’s property or job site.
BOPs provide several types of coverage in one policy
Many insurers offer business owners policies (BOPs) to cover the basic insurance needs of a small business. The standard BOP gives you CGL, commercial property and business income insurance in one bundled policy, usually priced lower than if you had to buy the three separately.
Business income insurance, also known as business interruption insurance, replaces lost income if your operation is shut down due to a fire or natural disaster. An insurer may allow you to add this coverage to your BOP, but you may need to purchase it separately. BOPs usually don’t include auto insurance or workers’ compensation insurance, either.
Commercial package policies (CPPs) offer more flexibility than a BOP. You can tailor CPPs to your needs, since they allow you to add the coverage you want and drop the coverage you don’t. Talk to an insurance professional about designing a business insurance plan that works for you.
Workers’ compensation may be required
If you own a contracting company with employees, you already know that most states require employers to carry workers’ compensation insurance. Workers’ comp protects your employees if they’re injured on the job. It pays for medical and rehabilitation expenses, as well as wages while an employee recovers.
You may be exempt from workers’ comp if you’re a sole proprietor or have only one or two employees. Check the workers’ comp laws in your state.
Keep in mind that your claims history will affect your rates. You can keep your claims down by instituting a health and safety program at your company. Electrical work can be very hazardous if precautions aren’t taken. Make sure your employees are following correct safety procedures.
As you consider your insurance needs, gather some basic information about your operations and your commercial property. Your premiums will be based on the size of your business, number of employees, claims history, the assets you own and the location of your company.
Work with an experienced insurance professional to get the best prices and coverage for your needs. You’ll have peace of mind knowing you’re protected against expensive claims and can confidently take on new business to grow your company.