Would you like to start your own electrical contracting service? It’s a lucrative venture if you possess proper knowledge, training, skills, and certifications. However, this business also carries many risks, and you may need adequate coverage to protect your finances. Here are six reasons why you’ll need customized electrical contractor insurance.
- Establishes Confidence Among Clients
Electrical work is complex and risky, which is why clients often gravitate toward the most experienced professionals. Carrying proper insurance such as general liability insurance is a signal to clients that you care about their safety as well as yours. Lacking the right insurance is a red flag that can scare away potential prospects. On average, general liability coverage costs about $540 per year.
- Protects Your Business Reputation
Your electrical contractor insurance should include professional liability coverage. If a client is unhappy with your work standard and claims to have suffered loss, there can be legal trouble. The right liability coverage will protect your personal assets and also reduce damage to your company’s reputation. Professional liability coverage costs about $1,060 per annum.
- Safeguards Your Employees’ Interests
Every state requires employers to carry workers’ compensation if they hire employees. Workers comp is separate insurance from general liability coverage and pays for medical bills if workers are injured on the job. It also pays the employee benefits if they miss work due to an injury or illness. The average cost of workers comp is nearly $3,275 per year.
- Covers Lost or Damaged Assets
Electrical contractors invest in various expensive equipment and tools. So, it’s wise to make sure that these assets are backed by insurance in case they get damaged or stolen. The contractor equipment coverage helps you maintain business continuity and spares you from high expenses in repairing or replacing the items. This coverage can cost you about $500 a year.
- Meets Government and Lender Requirements
The main two legal requirements most states have for businesses are workers’ compensation and commercial auto coverage, if applicable. There are other types of coverage you may need to comply with laws, such as privacy protection of client data.
If you borrow money from a financial institution to pay for vehicles, the firm will likely require you to carry full auto coverage, which can run to about $1,700 per year. Likewise, you may need to carry a certain amount of insurance if you buy equipment with a loan. You will definitely need commercial property insurance if you purchase commercial property on a mortgage.
- Covers Contract Disputes
Another good reason to get electrical contractors insurance is to settle contract disputes. This coverage is included in a general liability plan. It’s important for your company’s reputation and client relationships to settle disputes in a professional manner. These disputes might arise from disagreements in perceptions about responsibilities and specific work details.
Your general liability coverage won’t cover contract disputes, but professional liability coverage will pay for attorney fees, court costs, and financial settlements. The disagreement may also be due to a delay in client payments. For smaller contractors, it may result in a temporary halt in operations. Business interruption insurance provides you with an income inflow in such cases.
There is a definite need for all electrical contractors to carry proper insurance that provides access to jobs and covers expenses in the event of mishaps. There are different types of insurance plans to consider, particularly those tailored for electrical contract work. Keep in mind the greater the risks, the more coverage you’ll need. Working on large-scale electrical systems, for example, requires higher coverage limits.
At Artisan Insurance Solutions, we can help you secure the appropriate contractors insurance in Los Angeles, CA.
Contact our team of expert insurance agents today, and we will assist you in getting the right insurance coverage.