Hvac Contractor Insurance – What Kind and at What Cost

Whenever you budget the expenses of your business, hvac contractor insurance must be near the top of the list because you can’t always know exactly what is going to happen in the future.

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With the protection provided by general insurance and all the other types of insurance we will tell you about, you can protect your business and yourself in case something unexpected happens.

Like any business owner, for your hvac contractor enterprise, you must consider how much financial liability you are taking on.

Business Insurance for hvac contractor

If your hvac contractor business runs without proper insurance, you are taking an enormous chance not just of losing some money but of a final wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the results of their actions. 

In this article, we are giving very general guidelines for growing businesses to highlight what the main kinds of insurance that you need are, and where available, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your hvac contractor business?

What this means, for any hvac contractor business owner, is that if some company claims that your work caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your hvac contractor business is not sheltered by laws in the same way as states are, where edicts can place a “cap” on the maximum level of liability.

In some states, like New Jersey, there are specific monetary levels that limit the amount an adjudicator can award in any case against the state.

In a court case, it’s purely the duty of the jury to award whatever amount they deem appropriate, even sometimes giving a claimant more than they have sued for.

When you are running your hvac contractor operations, you can’t escape responsibility for the outcomes of your actions.

Even more importantly, unless you have spent in advance the money necessary to have your business running as an LLC, all of that liability belongs to you alone.

What does hvac contractor insurance protect you from?

For your hvac contractor business, the most important sorts of insurance are meant to cover the risks to your business from accidents, from unexpected events, and from mistakes.

Also there are some official kinds of insurance that various states require.

In the next few paragraphs, we will explain the most important points any hvac contractor business owner should consider when negotiating the insurance needed.

The main categories of insurance for your hvac contractor businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any hvac contractor business is dealing directly with members of the public, and that means you usually have the danger that some accident can happen to them bodily or else something of theirs can be ruined.

In such a case, they can demand compensation.

General liability insurance policy for your hvac contractor business covers you against claims coming from injury to clients or damage to their property.

It protects your hvac contractor business from the claims themselves and in addition to any associated court costs and legal fees of the lawsuits.

In many cases, it will even help you to qualify for extra business from city and state organizations, where contracts require proper liability insurance.

The normal level of general liability insurance for your hvac contractor business would be with a cap of $1 million for a single submission and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your hvac contractor insurance operations.

Professional liability insurance for your hvac contractor business

In the event where a client alleges some negligence, errors, or omissions in how you conducted your hvac contractor business for them, you can quickly face a law suit.

Even if the case against you is judged in your favor, the cost of defense can be high, and the impact on your reputation can be damaging.

Most small hvac contractor business should have enough professional liability insurance to cover an individual claim of $25,000, with annual cover of $50,000.

See the table in the cost of hvac contractor insurance section below for average prices of professional liability insurance for your hvac contractor operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that buyers may claim that what they received didn’t meet your description of function, or that your recommendation was basically incorrect.

You need to be aware of the specific laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held culpable for damages caused by products claimed to be defective.

To cover yourself against any possible lawsuit, you need Product liability insurance for hvac contractor

Only you can estimate exactly how much insurance you should get.

Best advice is to talk to experienced insurance agents, brokers or company representatives for help.

Commercial insurance

Commercial vehicle insurance for your hvac contractor business

Take care! – most policies for private vehicle insurance do not cover any happening like theft or accidental damage when the vehicle is being used for business purposes.

The right way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a designated commercial vehicle insurance package.

Commercial truck policies guarantee the value of any vehicle in case of accident, malicious damage, fire, or theft.

As well, in case of any accident, the truck itself, the content and any legal bills, medical expenses, and property damage is insured if your car is involved in a collision.

Most states, other than Virginia and New Hampshire, mandate this type of insurance.

The required value of the insurance depends on the depreciated value of the vehicle, and your requested level of cover of contents. 

Tools and Equipment insurance

Since your hvac contractor business needs specialized and expensive equipment, you will realize how much it can cost to replace it in case of any damage, loss, or theft.

The equipment may be subject to malicious damage, deliberate fire, theft, other such unexpected acts.

As well, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can eliminate your whole business in one stroke.

Unless you can afford to immediately replace such specialized gear quickly out of your own pocket, you should have full-level equipment insurance so that you can immediately buy whatever needed to keep your hvac contractor business running.

It is difficult to advise how much equipment insurance you need – it’s essentially dependent on how much you have invested in your hvac contractor business’ equipment.

Commercial Property insurance

Any hvac contractor business that owns or rents space in a building must have a commercial property insurance policy.

If you own the property, you certainly have a substantial capital investment, as well as a big liability if there’s a mortgage.

Every physical building location needs to carry insurance coverage for the value of the premises and contents against natural occurrences like fire and storms, and against deliberate damages like theft and vandalism.

If your hvac contractor business deals in areas of high risk, like California or Georgia, supplementary coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Washington, where extreme cold snaps can cause damage to outer coverings of hvac contractor business premises, there is a need for more supplementary cover than in warmer climes.

Whereas the level of cover depends mainly on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of hvac contractor insurance section below to give some estimate of the average prices per million dollars of property insurance for your hvac contractor business.

Temporary insurance by month, week or day for your hvac contractor business

Is your hvac contractor business working part-time or casually, or is the level of business seasonal?

Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for hvac contractor – are special policies where you can cover a designated period when you want to be covered.

By only paying for that period of cover, you will save by having lower premiums but still having the same risk cover.

The essential feature of short-term insurance is that you purchase the cover for a defined period – a specific date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of higher business activity, get the existing cover increased.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your hvac contractor business

You have the option to combine several of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP integrates commercial property and public liability insurance by incorporating these coverages into one insurance policy, which can save you money.

BOP insurance will shield you if any claims of injury or property damage are made.

It is mostly the right choice for small and medium-sized hvac contractor businesses, such as yours.

There are some limits that will rule whether BOP is suitable for your own business.

BOPs will not cover your professional liability or commercial vehicle risks.

Also, the size of your business will rule whether you are permitted to take out BOP cover.

The normal business that is eligible for a BOP policy must have no more than one hundred employees, and under five million dollars in annual sales.

As well, you must separately take out the mandated worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your hvac contractor business employees

In many states, it is mandatory to have workers compensation insurance when your hvac contractor business has one or more employees.

Workers compensation insurance covers the business against any costs that arise if a worker experiences an injury or becomes sick as a result of work.

The benefits provide for medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s laws in this regard can leave you as the employer having to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only authorize coverage from the government-run monopoly state funds.

In these states, you may not obtain your workers compensation obligations from private insurance companies.

Workers compensation charges are calculated based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must refer to the relevant authorities in your state.

Average costs of these types of insurance

Although every hvac contractor insurance level is unique, there are enough examples of usual quotes from insurance companies for us to give appropriate guidelines, including what are the cheapest rates offered.

Of course, you should always check with an insurance representative what’s relevant for your business.

The list below is of annual premiums we have collected for the main types of insurance your hvac contractor businesses needs.

Types of insurance Price range
Public liability insurance $260 – $545
Product liability insurance $260 – $600
General liability insurance $725 – $1105
Commercial vehicle insurance $1670 – $2630
Equipment insurance $475 – $1340
Commercial insurance $830 – $2680

Cost of insurance for your hvac contractor operations depends on many different factors.

We have estimated these figures for small independent hvac contractor businesses.

In larger states like New York, premiums are generally about 20%-30% higher than national averages, whereas in smaller states like Utah, they usually are about 20%-30% less.

The location and size and type of your hvac contractor business can have a big effect on the cost of different policies.

You should discuss with professional insurance agents and brokers, or insurance company representatives.

As well you can let the internet do the work for you by searching for insurance companies near where your business is located.

Another good source of information is the local Better Business Bureau in your city.

FAQ

What is small business insurance for hvac contractor operations?

This is a general term used to describe basic insurance policies designed to protect hvac contractor business owners from risks like bodily injury, property damage, claims of negligence.

Does my hvac contractor business have to have insurance?

Some of the kinds of insurance are not mandatory for you to open your business, but they can protect you from risks in your business operations.

Several other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small hvac contractor business insurance policy cover?

Liability insurance provides protection against lawsuits or claims filed by a customer for bodily injury, property damage, or negligence.

The specific cover will vary based on your own operations.

See the table in the costing section above for average prices of the recommended policies for hvac contractor insurance.

How much will hvac contractor business insurance cost?

As well as the size of the business, certain other factors, such as location and claims history, are used to determine your policy’s cost.

You should talk to professional insurance agents and brokers, or insurance company representatives.

You can search for more information insurance for hvac contractor, in the search box below, and follow the relevant links.

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