Does My Electrical Contracting Company Need Insurance?

Electrical contractors design, build, install, and maintain commercial and residential electrical systems. Households and businesses count on these professionals to set up and service lighting, heating, and other energy equipment necessary for their comfort and operation. In this line of work, its important to have coverage for yourself, your employees, and your clients. 

Here’s why you should have sufficient business insurance protection for your electrical contracting company.    

Acquiring and Retaining Clients 

Proper coverage is necessary to win the confidence of prospective clients. Most clients will ask to see proof of general liability insurance before they will offer you any work. They need the assurance that theyre protected in case of property damage or personal injury while you’re doing any electrical work for them. Sufficient liability insurance usually covers such incidences. However, if you dont have adequate coverage in place, clients may become concerned about having to pay for attorney fees and medical bills out of their own pockets if sued for worksite accidents. Proof of insurance removes such fears and helps you acquire and retain more clients. 

Coverage for ClientsLosses 

Despite your best effort and strict adherence to best practices, accidents can still happen on the job site. If a client suffers financial loss because of your mistakes, you may be held liable. For example, an electrical system you just installed in a restaurant may malfunction, interrupting the power supply to their refrigeration system. In turn, the client might successfully sue you for financial loss due to perished products and lost sales. Professional liability insurance can cover the losses, so you dont have to pay for those out of pocket.

Workplace Accidents Coverage

Workers’ compensation should be part of your electrical contractors insurance. Most states require a company to have workers’ compensation coverage if they have any employees. The purpose of this type of liability coverage is to pay for the medical costs, lost wages, or other damages if your employees become ill or get injured due to workplace accidents. That said, do your best to optimize the safety of your work environment to minimize the risk of on-the-job incidences.

Lost/Damaged Equipment

The loss or damage of crucial equipment can stall your project and cause losses or payment delays. Youll need to have the tools quickly fixed or replaced to avoid disappointing your client. It may not always be easy or possible to solve the problem and get back to work when youre counting on the unfinished job to boost your cash flow. This is where contractor equipment coverage comes in. It can pay to repair faulty mission-critical assets and cover losses and theft of tools.

Auto Coverage for Your Employees on the Road

When your employees are driving to and from the job site, theyre working for you. Their personal auto liability insurance doesnt cover them for car accidents that happen while working for your company. You need commercial auto liability insurance protection to cover yourself in such a scenario. You can also maximize coverage by having add-ons like collision/comprehensive coverage for your entire fleet.  

Business Interruption Coverage in Case of Contract Disputes

Not all clients will pay for work done as promptly as you expect. There can be payment delays due to contract disputes. Despite that, you still have to pay your own workers, suppliers, and even subcontractors. Thats why you may need to protect yourself with a business interruption policy even if you know youll eventually get paid. This insurance coverage can provide the funds to sustain your company as you engage the client in settling the contract dispute.  

As you can see, having the proper insurance coverage can protect your electrical contracting company, your employees, and your clients. Would you like to learn more about protecting your contracting business with the right commercial insurance policies? If so, get in touch with our experts at Artisan Insurance Solutions today. We are happy to help develop customized coverage for your company. 

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