Insurance needs and concerns for Electrical Contractors
Electrical contractors carry unique risks that many other businesses in the construction industry do not face. With those risks come additional types of insurance needs. Each electrician is unique in the scope and capacity in which they operate their business. Depending upon the type of work each electrician partakes’ in, there may be a number of types of coverage an electrician needs to secure in order to properly secure their business. Here is a list of 5 commonly carried coverages most electricians secure.
- General Liability
- Commercial Property
- Commercial Auto
- Inland Marine (Tools and Equipment)
- Workers Compensation
Exposures at the contractor’s office are generally limited because of the lack of access to the premises. Storing materials outdoors may create vandalism and attractive nuisance hazards. Electrical voltage is always a risk for electricians. This is due to the risk of electrical burns or electrocution to employees or other third parties. An electricians’ employees can cause damage to the client’s property and can cause bodily injury to members of the household, the public, or employees of other contractors. These are risks that are covered by a general liability policy.
If you own a property; no matter how small, your business needs to secure commercial property coverage. Property exposures at the contractor’s premises typically are fairly low for electricians. This is generally limited to those of an office and storage for supplies, tools, and vehicles.
Automobile liability exposure is higher for electrician than other brick and mortar businesses. Most electrical contractors are in transit to transport workers, equipment and electrical supplies to and from job sites. A driving hazard is a huge risk for insurance companies to insure. The more time your business spends driving the higher the likelihood of claims. Those claims tend to rise in both frequency and severity. Implementing a safe driving program and keeping up to date driving records for all employees can help limit what you pay in premium. Age, training, experience, and drivers’ records, as well as the age, condition, and maintenance of the vehicles, are all important items to consider.
Inland marine is also commonly called ‘Floaters’ coverage. It is meant for specialized equipment that is frequently in transit as a part of business operations. The exposures often include owned or rented equipment, building materials, as well as materials being transported to and from the job site. This is commonly needed for businesses that transport their equipment to a third party site for use delivering a service. The most basic example of an industry that needs this coverage is a landscaping company. It can also include any business that takes equipment away from the premises for use as a part of normal business operations.
Workers compensation insurance is required by law in 48 out of 50 states. Each state has their own specific exclusions depending upon the number of employees and the scope of your work. It is important to check with the proper governing agency in your state to determine if you are required to purchase this coverage. Even if you are not required to purchase this coverage in many cases it is still beneficial to your business to secure it. The coverage provides you with protection from lawsuits that may result from injured employees who are injured as a result of normal business practices. Employees give up the ability to sue for normal injuries, but get back coverage for their medical expenses and some portion of their wages while they are hurt and not able to work. Typically they are reimbursed 60 percent of their normal wages for the time they are not able to work.