Mechanical Contractors Insurance – Cost and Types Of Policies

Whenever you budget the expenses of your business, mechanical contractors insurance must be included in the list because you can’t always know exactly what can happen in the future.

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

Like any business owner, for your mechanical contractors enterprise, you must consider how much financial danger you are taking on.

If your mechanical contractors business runs without proper insurance, you are taking a giant chance not just of losing some money but of a complete wipe-out.

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

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

The question is, can you afford to NOT have insurance for your mechanical contractors business?

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

Your mechanical contractors business is not protected 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 a court can award in any case against the state.

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

When you are running your mechanical contractors operations, you can’t deny responsibility for the results of your actions.

Even more importantly, unless you have spent beforehand the money necessary to have your business running as a limited liability company, all of that liability belongs to you as an individual.

What does mechanical contractors insurance protect you from?

For your mechanical contractors business, the most important kinds of insurance are designed to cover the risks to your business from accidents, from unexpected events, and from mistakes.

In addition there are some legal kinds of insurance that various states require.

In the next few paragraphs, we will describe the most important points any mechanical contractors business owner should consider when negotiating the insurance needed.

The main types of insurance for your mechanical contractors businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any mechanical contractors business is dealing directly with other people, and that means you generally have the danger that some accident can happen to them personally or else something of theirs can be spoiled.

In such a case, they can sue you for compensation.

General liability insurance policy for your mechanical contractors business covers you against claims coming from injury to visitors or damage to their property.

It protects your mechanical contractors business from the claims themselves and as well to any associated court costs and legal fees of the lawsuits.

In many cases, it can also 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 mechanical contractors business would be with a boundary 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 mechanical contractors insurance operations.

Professional liability insurance for your mechanical contractors business

In the event where a client alleges some negligence, errors, or omissions in how you conducted your mechanical contractors business for them, you can quickly face a monetary claim.

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

Almost all small mechanical contractors business should have enough professional liability insurance to cover a once-off claim of $25,000, with annual cover of $50,000.

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

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that customers 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 particular laws of product liability in your own state.

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

To cover yourself against any likely lawsuit, you need Product liability insurance for mechanical contractors

Only you can determine exactly how much insurance you must have.

Best advice is to consult with experienced insurance agents, brokers or company representatives for support.

Commercial insurance

Commercial vehicle insurance for your mechanical contractors business

Be careful! – practically all policies for private vehicle insurance do not cover any event like theft or accidental damage when the vehicle is being used for business purposes.

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

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

In addition, in case of any accident, the van itself, the content and any legal bills, medical expenses, and property damage is covered if your van is involved in a crash.

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

The necessary value of the insurance is worked-out for the depreciated value of the vehicle, and your intended level of cover of contents. 

Tools and Equipment insurance

Since your mechanical contractors business needs specific and costly equipment, you can appreciate how much it can cost to replace it in case of any damage, loss, or theft.

The gear may be subject to malicious damage, deliberate fire, theft, other such unforeseen acts.

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

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

It is difficult to advise how much equipment insurance you need – it’s really dependent on how much you have invested in your mechanical contractors business’ equipment.

Commercial Property insurance

Any mechanical contractors business that owns or rents space in a building should have a commercial property insurance policy.

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

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

If your mechanical contractors business deals in areas of high risk, like California or South Carolina, supplementary coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Rhode Island, where unlimited cold snaps can cause damage to outer coverings of mechanical contractors business premises, there is a need for more supplementary cover than in warmer climes.

Although the level of cover depends completely 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 mechanical contractors insurance section below to give some idea of the average prices per million dollars of property insurance for your mechanical contractors business.

Temporary insurance by month, week or day for your mechanical contractors business

Is your mechanical contractors business working part-time or casually, or is the level of business variable?

Using short-term insurance makes excellent sense. Business insurance by the month, day, or week – temporary insurance for mechanical contractors – are special policies where you can cover a nominated 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 identical risk cover.

The essential feature of short-term insurance is that you purchase the cover for a defined period – a nominated 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 better business activity, get the existing cover raised.

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

Business Owners Policy BOP for your mechanical contractors 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 merges commercial property and public liability insurance by packaging these coverages into one insurance policy, which can save you money.

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

It is often the right choice for small and medium-sized mechanical contractors businesses, such as yours.

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

BOPs do not cover your professional liability or commercial vehicle policies.

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

The usual business that is allowed to take a BOP policy must have fewer than one hundred employees, and under five million dollars in annual revenue.

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 mechanical contractors business employees

In most states, it is mandatory to have workers compensation insurance when your mechanical contractors business has one or more employees.

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

The benefits cover 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 permit coverage from the government-run monopoly state funds.

In these states, you can’t obtain your workers compensation obligations from private insurance companies.

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

However, you must see the relevant authorities in your state.

Average costs of these types of insurance

Although every mechanical contractors insurance requirement is unique, there are enough examples of average quotes from insurance companies for us to give rough guidelines, including what are the cheapest rates offered.

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

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

Cost of insurance for your mechanical contractors operations depends on many different factors.

We have estimated these figures for small freelance mechanical contractors businesses.

In larger states like California, premiums are generally about 20%-30% higher than national averages, while in smaller states like Utah, they will be about 20%-30% lower.

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

You should consult 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 suburb.

FAQ

What is small business insurance for mechanical contractors operations?

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

Does my mechanical contractors business have to have insurance?

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

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

What does a small mechanical contractors business insurance policy cover?

Liability insurance provides protection against lawsuits or claims filed by a client 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 best policies for mechanical contractors insurance.

How much will mechanical contractors business insurance cost?

In addition to 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 mechanical contractors, in the search box below, and follow the relevant links.

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