An electrician’s job is considered as one of the most dangerous ones in America, according to Business Insider, it has a fatality rate of 8.8 (per 100,000 workers). This is not shocking, to say the least, given the inherent danger of this type of work and the exposure that workers go through every day at work. For an electrical contractor, it is important to obtain the right electrical contractor insurance to ensure your workers are safe as they perform their job.
The risks of doing electrical work are not just limited to the possible injuries (or even death) that could happen to the electricians themselves. There are also imminent dangers for causing fire due to a faulty job, or damage to the property where the electrical work is being done. This career is not for the faint of heart and being uninsured could lead to disastrous outcomes.
When shopping for electricians insurance, use this guide to find an insurance policy that will provide adequate protection.
Is electricians insurance mandatory?
Obtaining electricians liability insurance is another expense for your business. However, it’s an ill-advised move to forego buying insurance in order to save money.
The requirements in terms of insurance for all kinds of businesses, especially high risk ones like an electrical contractor business, vary from one state to another. However, you can expect that insurance will be required when contracting trades and services. There are different local and state laws to observe that will indicate the minimum coverage requirements for the policy.
Mandatory or not, it is smart to invest in an insurance policy as it will protect your business from significant financial liabilities down the road.
Coverage you need for electrical contractor insurance
Buying electricians insurance will give you coverage for the potential hazards that you may face during the course of your work. It is important to understand what type of coverage to get based on your unique needs.
Electricians Liability Insurance – This is the primary coverage that every electrician should get when buying a policy. If you are carrying out a job that is directly exposed to members of the public – whether it is in a residential or commercial property – this type of coverage is essential. It will protect your business against any injury or property damage that could result from your work. If you face a lawsuit, you can use this policy to cover for the legal expenses, as well as medical expenses (if needed).
Workers Compensation Insurance – Accidents in the workplace are inevitable, no matter how careful you are. Therefore, you need to include employer’s liability insurance in your policy. This coverage will provide the support and compensation that your workers need in the event of an accident at work. You can eliminate the financial burden on your business while also ensuring that your employees are taken care of.
Tools and Equipment Insurance – Your tools and equipment are the lifeblood of your business. In the event that you have damaged or lost any of your tools and equipment, this type of coverage will handle the repair and replacement. As a result, you won’t need to dig into the company’s finances in order to cover for these expenses.
It is also best to consider additional coverage for your electrical contractor business. The additional coverage you get will depend on the nature and size of your business. Here are some of the additional options to consider:
Vehicles – If you rely on the use of business vehicles to provide electrical services to clients, it’s smart to purchase additional coverage for your vehicles. Consider buying a separate insurance if you have a fleet of two or more vehicles.
Buildings Coverage – If your electrical contractor business has its own office, then you may want to consider buying additional coverage in the event of fire, flooding, and other types of weather damage.
Subcontracting – If you provide subcontracting services, it is best to obtain additional coverage for that as it might not be covered by your main policy.
Examining the costs of electricians insurance
A common mistake that electricians make when buying insurance is to look at the cost of the policy at face value. However, there are numerous factors that can directly impact the cost of buying insurance. A deeper understanding of your business needs and the level of risks you are exposed to will determine the ideal cost of your policy. Take this into account when comparing insurance policies.
To determine the cost of your policy, insurance companies will look at the size of your business and your credentials first. If you are a fully-licensed and certified electrical contractor with no claims history for many years, this will help to reduce your insurance premium. It shows your reliability on the job and the reduced likelihood of injury or property damage you are likely to cause.
The number of employees that you have is another point of consideration. The more people work for you, the higher the cost of your insurance policy. This is to ensure that you have adequate coverage for the worker’s compensation. The same goes for your vehicles, too (or vehicle fleet).
Lastly, insurance companies will be looking at the types of tools and equipment you use, as well as their corresponding value (or cost of repair).
What if you’re a self-employed electrician?
You might think that buying insurance is no longer necessary if you’re self-employed. However, it is actually more important that you get one – to protect your main source of livelihood.
You are exposed to the same set of risks as electrical contractors are; therefore, you have no reason to be exempt from obtaining insurance. In addition, most customers expect their electrical contractors to be licensed and insured, whether you are self-employed or operating as a business.
These are the 8 Reasons Why Electricians Insurance Is A Must if you’re a self-employed electrician.
Conclusion
When comparing various policies for electricians insurance, it is imperative that you look closely at the level of coverage you get. Aside from looking at what’s included, you must also check what’s excluded from your policy. If your insurance policy is incapable of providing financial protection for your business, then what’s the point of having one?
While your aim might be to save money, don’t be so focused on saving money that you compromise the protection your business can get. Instead, focus on where you can get the best value for money. This is why insurance experts recommend you compare at least three quotes to get the best policy out there.
