Electrician insurance is a policy, or combination of policies, that protects your business from financial loss from claims of third-party property damage, workplace injuries, damaged business property, or loss of business income.
Some license boards require electrical liability insurance like general liability insurance, while most states will require workers’ comp if your business has employees. Beyond these two coverages, some electricians may need more coverage, like inland marine, for their tools and equipment. Electrical contractors usually pay an annual average of $500 to $1,200 for general liability.
Key Takeaways:
- Electrician insurance is any policy purchased by an electrician to protect their business. The protection can come from liability claims or first-party losses.
- Electricians may be required to carry insurance either for licensing (general liability) or to comply with state law (workers’ comp and commercial auto insurance).
- Carrying electrical contractor insurance will be necessary to get any sort of construction job.
Electrician Insurance Costs
Being an electrician is an inherently risky business. The nature of the job is such that simply by coming into contact with a live wire, an individual can die almost instantly. This means that not only is there significant liability risk for insurance companies, but the chance an employee is injured is also high.
Beyond the natural risk of the industry, when calculating electrician insurance costs, providers take a number of details about your business into account. A one-person operation that does small residential work can expect to pay less than a large electrical contractor with a team of employees and a fleet of work trucks. For this reason, premiums can vary greatly for electricians. Keeping that in mind, we’ve obtained multiple quotes for a small business and compiled estimated annual premiums.
Policy Type | Estimated Average Annual Premium | Coverage Limit |
|---|---|---|
Electrician Liability Insurance | $500-$1,200 | $1 million per occurrence, $2 million aggregate |
Inland Marine | $175-$550 | $5,000 for tools and equipment with $500 deductible |
Business Owner’s Policy (BOP) | $670-$2,660 | $1 million per occurrence, $2 million aggregate, and $15,000 business personal property with a $500 deductible |
Commercial Auto Insurance | $3,450-$4,800 | $300,000 combined single limit for liability |
Every state—except for Texas and South Dakota—requires workers’ compensation insurance. However, even in those states, there are specific rules. For instance, in Texas, contractors in construction must still provide workers’ comp insurance. The threshold for when workers’ comp is required changes by state.
When it comes to determining your costs, providers will consider specific factors like your experience and business size.
- The size of your business: The number of employees increases the risk for a loss.
- Your experience: The number of years you have been working in this industry should translate into less risk.
- Your claims history: If you have had a claim in the last three to five years, then your rates will likely be higher.
- Your certifications: Keeping your licensure and certification up to date is important, including for insurance purposes.
- The value of your property: The value of your tools and equipment, as well as if you own or lease a building, will impact the cost of the policies.
- The nature of your work: Providers assess risk differently for residential vs commercial electricians, and the type of work your business does is a very large part of premium calculations. If you’re interested in learning more about the rates and factors influencing cost, check out our article about how a general liability premium is calculated.
Ways to Save Money
If your electrician insurance costs are too high, there are ways to save money on your premium:
- Assess your limits: Your limits may be higher than you need for the size and exposure of your business. For example, most general liability policies carry an aggregate limit of $2 million, but some go as high as $4 million and as low as $300,000. What is your limit, and is it higher than you need?
- Raise your deductible: If you are carrying first-party coverage like commercial property, then you’ll carry an insurance deductible—and adjusting it should lower your premium. Just remember: if you file a claim, then you will be responsible for the amount of the deductible.
- Shop around: Most insurers will let you cancel your insurance. Shop around and see if there is another carrier willing to offer your coverage for a lower monthly rate.
How to Purchase Electrician Contractor Insurance
Whether you’re just starting out or changing providers, you have multiple options for purchasing electrician contractor insurance.
- Gather all of the necessary information about your business. This includes anticipated revenue, payroll, value of business property, and an overview of the type of electrical work your business performs.
- Start collecting quotes. You can get quotes directly from the provider, through an agent or a broker. The advantage of a broker is that the number of different companies they work for can make it easier to have one point of contact while getting multiple quotes from different companies.
- Get as many quotes as you wish, as quotes are free and do not come with an obligation to purchase from that company. So once you have collected several quotes, compare the quotes to determine which one is best for your business—including the cost.
- Finally, once you have settled on a policy, purchase it. But keep in mind that policies can always be canceled or modified. Limits can be raised or lowered and endorsements purchased to modify the coverage.
What Coverages Do Electricians Need?
While the specific insurance needs will vary depending on the size and focus of your electrical company, generally, there are key policies every electrician should consider when determining what electrician insurance policy to buy.
Type of Insurance for Electrical Contractor | Types of Covered Losses |
|---|---|
General Liability | Third-party claims of bodily injury, property damage, and advertising injury |
Inland Marine | Tools and equipment that move from job site to job site |
Business Owner’s Policy (BOP) | Combination of general liability, commercial property, and coverage for loss of business income |
Workers’ Compensation Insurance | Medical bills and wage replacement for employees who become injured or ill as a result of their job |
Commercial Auto Insurance | Third-party claims of bodily injury and property damage when your vehicle is at fault; can also have first-party coverage for the vehicle |
Hired & Nonowned Auto | Liability endorsement to cover auto accidents for vehicles that are not owned by the business |
Because of the risks associated with electrical work, every electrician needs a commercial general liability policy. General liability provides broad liability coverage against claims that, because of your work, someone was injured, their property was damaged, or you caused reputational or personal advertising harm.
For example, if you leave live wires exposed while working in a house and someone is inadvertently shocked by them, they could file a claim against you. General liability would handle those associated costs.
Electricians have tools that help them do their job. Most commercial property policies only cover items at listed locations—but with inland marine, you can list specific tools or get a blanket coverage amount for tools and equipment. This coverage follows the tools wherever they go, so if some equipment is damaged at a job site, then you can file a claim to replace them.
A business owner’s policy is a great way to save money. It is a combination of general liability and commercial property, and it usually includes lost business income coverage, too. Typically, when these policies are combined, it costs less than purchasing each of them on their own. It also helps with record keeping, as you only have one policy and one insurance company for all three coverages.
Workers’ compensation insurance is required in almost every state, with limited exceptions. Workers’ comp insurance protects against the risks of an on-the-job injury or death.
In case of injury, workers’ compensation coverage pays for the following:
- Medical costs incurred in treating on-the-job injuries
- Lost wages if workers miss time at work
- Temporary or permanent disability benefits for total or partial disability
- Death benefits to surviving dependents after a workplace fatality
Commercial auto insurance provides coverage for all work vehicles you own. It also provides coverage for injuries and property damage caused by an employee involved in an on-the-job auto accident. Liability coverage is state-mandated for vehicles, but you can also purchase first-party coverages, such as collision and comprehensive, to cover the damage to your vehicle.
It should be noted that commercial auto insurance is required by law in every state. If your business owns a vehicle, then you will have to purchase the required state minimum liability.
If your business doesn’t own any vehicles but you or your employees drive frequently for work, it is worth looking into hired and nonowned auto. This is an endorsement for general liability that will extend your liability coverage to auto accidents for vehicles not owned by the business. Since this is a liability coverage, it will only help with third-party damage when your business is liable for the loss.
Electrical Contractor Insurance: Claim Examples
Having electrician insurance is crucial because of the multiple types of losses your business can face. For example, an employee climbs a ladder to work on wiring for lights. The ladder shifts, and the employee falls and is injured. In an unfortunate situation like this, workers’ comp can help the employee with their medical bills and lost wages while providing your company liability protection.
You’re on site working on adding some outlets to a home and, in the course of conversation with the homeowner, make some disparaging remarks about a local business. Unbeknownst to you, the homeowner is in-laws with that business owner. General liability has a provision for personal injury and advertising harm. So, if this business owner were to file a suit for defamation, you could file a claim for help on your general liability policy.
Sometimes, accidents happen, and no one is to blame. You’re driving to a job early in the morning when a deer jumps in front of your vehicle and you hit it. An accident like that is a first-party claim that would fall under the no-fault coverage of comprehensive insurance for your commercial auto.
You are working on a larger project that will take several days. For instance, after the first day, you leave your tools on site. When you return the next morning, you find someone has broken into the building and stolen all your tools. While one or two wouldn’t be too big of a deal, your entire tool set costs around $5,000. This is the type of loss you could file under inland marine insurance.
Who Needs Electrician Insurance?
Any business that employs an electrician needs electrician insurance. This includes individual electricians or companies employing electricians. The insurance protects your business assets, tools, and equipment while also protecting your company financially from claims of negligence.
The type of insurance needed and the limits will change depending on the size of your business and the scope of your operations. Additionally, some states may require general liability or a surety bond to obtain a license or to do work on larger projects.
State Requirements for Electrician Insurance
Did you know that some states require you to carry a form of general liability insurance? Sometimes, even if the state doesn’t require insurance, a local municipality or licensing board will still require proof of coverage. Check out the guide below to see your state’s specific requirements:
State guide to electrical contractor insurance
AL
- License Required: Yes, provided through the Alabama Electrical Contractors Board
- Insurance Required: No
- Coverages Required: N/A
AK
- License Required: Yes, must obtain a certificate from the Department of Labor and Workforce Development.
- Insurance Required: Yes
- Coverages Required: Alaska requires workers’ compensation insurance if you employ even one person on a regular basis.
AZ
- License Required: Yes, provided through the Arkansas Department of Labor
- Insurance Required: Yes
- Coverages Required: Liability insurance (no specific amount) and workers’ compensation insurance
AR
- License Required: Yes, provided through the Arkansas Department of Labor
- Insurance Required: Yes
- Coverages Required: Liability insurance (no specific amount) and workers’ compensation insurance
CA
- License Required: Yes, provided through the Department of Consumer Affairs, Contractors State License Board
- Insurance Required: No
- Coverages Required: N/A
CO
- License Required: Yes, provided through the Colorado Department of Regulatory Agencies, Electrical Board
- Insurance Required: No
- Coverages Required: N/A
CT
- License Required: Yes, provided through the Connecticut Department of Consumer Protection
- Insurance Required: Yes
- Coverages Required: Workers’ compensation
DE
- License Required: Yes, provided through the Licensing board: Delaware Division of Professional Regulation, Board of Electrical Examiners
- Insurance Required: Yes
- Coverages Required: Limited; master and Special Master Electrician must have $300,000 of general liability insurance.
FL
- License Required: Yes, electrical contractors in Florida must hold a state license issued by the Florida Department of Business and Professional Regulation.
- Insurance Required: Yes
- Coverages Required:
- Provide proof of general liability and property damage insurance, within 30 days of receiving your license.
- $300,000 per occurrence
- $500,000 property damage insurance
- $800,000 per combined single unit
- Workers’ compensation insurance
GA
- License Required: Yes, provided through the Construction Industry Licensing Board, Division of Electrical Contractors.
- Insurance Required: No
- Coverages Required: N/A
HI
- License Required: Yes, issued by the Hawaii Board of Electricians and Plumbers.
- Insurance Required: Yes
- Coverages Required:
- Bodily Injury Liability: $100,000 per person and $300,000 per occurrence
- Property Damage Liability: $50,000 per occurrence
ID
- License Required: Yes, provided through the Idaho Division of Building Safety.
- Insurance Required: Yes
- Coverages Required: At least $300,000 worth of liability insurance and workers’ compensation.
IL
- License Required: No
- Insurance Required: No
- Coverages Required: N/A
IN
- License Required: No
- Insurance Required: No
- Coverages Required: N/A
IA
- License Required: Yes, provided through the Iowa Department of Public Safety, State Fire Marshal Division.
- Insurance Required: No
- Coverages Required: N/A
KS
- License Required: No state licensing; electrical licenses are issued by local municipalities.
- Insurance Required: Yes
- Coverages Required: At least $300,000 of general liability insurance, as well as workers’ comp insurance and adequate auto insurance coverage.
KY
- License Required: Yes, provided through the Department of Housing, Buildings, and Construction Electrical Division.
- Insurance Required: Yes
- Coverages Required: At least $500,000 worth of general liability and workers’ compensation.
LA
- License Required: Yes, provided through the Louisiana State licensing board for contractors.
- Insurance Required: Yes
- Coverages Required: Minimum $500,000 of general liability and a workers’ comp policy
ME
- License Required: Yes, provided through the Licensing board: The State of Maine Electricians’ Examining Board
- Insurance Required: No
- Coverages Required: N/A
MD
- License Required: Yes, provided through the Maryland Department of Labor – Board of Master Electricians
- Insurance Required: Yes
- Coverages Required: Minimum of $300,000 in general liability insurance, and minimum of $100,000 in property damage insurance
MA
- License Required: Yes—for Master Electrician only; issued by the Maryland Board of Master Electricians.
- Insurance Required: No
- Coverages Required: N/A
MI
- License Required: Yes, provided through the Michigan Department of Licensing and Regulatory Affairs, Bureau of Construction Codes.
- Insurance Required: No
- Coverages Required: N/A
MN
- License Required: Yes, provided through the Department of Labor and Industry.
- Insurance Required: Yes
- Coverages Required:
- $25,000 surety bond
- $100,000 per occurrence of general liability insurance
- $300,000 of bodily injury insurance
- At least $50,000 of property insurance
MS
- License Required: Yes, provided through the Mississippi State Board of Contractors.
- Insurance Required: No
- Coverages Required: N/A
MO
- License Required: No
- Insurance Required: Yes
- Coverages Required: $500,000 of contractor liability insurance
MT
- License Required: Yes, provided through the Montana Department of Labor and Industry, State Electrical Board.
- Insurance Required: Yes
- Coverages Required:
NE
- License Required: Yes, provided through the Nebraska Electrical Division.
- Insurance Required: No
- Coverages Required: N/A
NV
- License Required: Yes, provided through the Nevada State Contractors Board.
- Insurance Required: No
- Coverages Required: N/A
NH
- License Required: Yes, provided through the Office of Professional Licensure and Certification, Electrician’s Board.
- Insurance Required: No
- Coverages Required:
NJ
- License Required: Yes, provided through the The Board of Examiners of Electrical Contractors.
- Insurance Required: No
- Coverages Required: N/A
NM
- License Required: Yes, provided through the New Mexico Regulation and Licensing Department.
- Insurance Required: No
- Coverages Required: N/A
NY
- License Required: No
- Insurance Required: No
- Coverages Required: N/A
NC
- License Required: No
- Insurance Required: No
- Coverages Required: N/A
ND
- License Required: Yes, provided through the North Dakota State Electrical Board.
- Insurance Required: No
- Coverages Required: N/A
OH
- License Required: Yes, provided through the Ohio Construction Industry Licensing Board (OCILB).
- Insurance Required: Yes
- Coverages Required: At least $500,000 contractor liability insurance to OCILB to receive electrical contractor license.
OK
- License Required: Yes, the Oklahoma Construction and Industries Board (CIB) issues electrician licenses in the state of Oklahoma.
- Insurance Required: Yes
- Coverages Required: Minimum of $50,000 commercial general liability insurance in the form of a certificate of general liability.
OR
- License Required: Yes, provided through the Department of Consumer and Business Services, Building Codes Division.
- Insurance Required: No
- Coverages Required: N/A
PA
- License Required: No
- Insurance Required: Yes
- Coverages Required:
- Pittsburg: Possess general liability insurance of no less than $300,000
- Philadelphia: Secure general liability insurance coverage of $500,000, workers’ compensation, and auto insurance.
RI
- License Required: Yes, provided through the Licensing board: Division of Workforce Regulations and Safety, Professional Regulations Unit.
- Insurance Required: No
- Coverages Required: N/A
SC
- License Required: SC
Yes, provided through the South Carolina’s Contractor’s Licensing Board. - Insurance Required: No
- Coverages Required: N/A
AK
- License Required: Yes, provided through the South Dakota Department of Labor and Regulation, Electrical Commission.
- Insurance Required: Yes
- Coverages Required: Electrical contractors also must submit a $10,000 bond to the electrical commission, provide proof of $100,000 public liability insurance, and proof of $300,000 bodily injury and property damage insurance.
TN
- License Required: Yes, provided through the Licensing board: Department of Commerce and Insurance, Board of Licensing Contractors.
- Insurance Required: No
- Coverages Required: N/A
TX
- License Required: Yes, issued by the Texas Department of Licensing and Regulation.
- Insurance Required: Yes
- Coverages Required:
- Minimum $300,000 per occurrence (combined for property damage and bodily injury)
- Minimum $600,000 aggregate (total amount the policy will pay for property damage and bodily injury coverage)
- Minimum $300,000 aggregate for products and completed operation
UT
- License Required: Yes, electricians must be licensed to work in Utah. The licenses are awarded by the Utah Department of Commerce, Division of Occupational and Professional Licensing.
- Insurance Required: No
- Coverages Required: N/A
VT
- License Required: Yes. To work in Vermont, you must obtain a license issued by the Department of Public Safety and Division of Fire Safety.
- Insurance Required: No
- Coverages Required: N/A
VA
- License Required: Yes. The Virginia Department of Professional and Occupational Regulation (DPOR), through the Virginia Board for Contractors, issues electrical licenses. Apprentice electricians must register with the Virginia Department of Labor.
- Insurance Required: No
- Coverages Required: N/A
WA
- License Required: Yes, provided by the Washington State Department of Labor and Industries.
- Insurance Required: No
- Coverages Required: N/A
WV
- License Required: Yes, issued by the West Virginia Fire Commission.
- Insurance Required: No
- Coverages Required: N/A
WI
- License Required: Yes. License is issued by the Wisconsin Department of Safety and Professional Services (DSPS).
- Insurance Required: No
- Coverages Required: N/A
WY
- License Required: Yes. Licenses are awarded by the Department of Fire Prevention and Electrical Safety.
- Insurance Required: No
- Coverages Required: N/A
Washington, D.C.
- License Required: Yes, electrical contractors working in the District of Columbia are required to hold a license from the DC Board of Industrial Trades.
- Insurance Required: No
- Coverages Required: N/A
Frequently Asked Questions (FAQs)
Workers’ compensation is required in every state except for Texas and South Dakota—but even these states have certain situations where a business may still have to offer it. The challenge with workers’ comp is that the threshold for each state varies for when it is required. For example, in Illinois, workers’ comp is required if a business has one employee—even if it is a part-time worker.
Meanwhile, New York requires every business to offer it to all employees, whereas Georgia workers’ comp isn’t required until the business has three employees.
General liability electrician insurance costs can range from $500 to $1,200 for a small residential operation. Expect them to increase based on the size and type of work (large-scale commercial vs small residential).
Some states and licensure boards require electricians to carry general liability insurance. For example, Hawaii and Kansas both require electrician liability insurance, while Iowa and Maine do not.
If, as an electrician, you bid on any kind of job, having electrician insurance is going to be essential. Nearly every type of work you bid on will require a certificate of insurance. This document is proof that you are insured and that your limits match the required limits of the project.
Bottom Line
There’s nothing more shocking than finding out you aren’t covered for a loss. Having the proper coverage is essential to be eligible for certain jobs, and it can protect you from financial disaster. Electricians need to ensure that they have appropriate liability insurance coverage in case claims are made against them or damage to their equipment or other property occurs.
If you’re an electrician, ensure your policy protects you from potential lawsuits and disasters. The Hartford is an industry-leading insurer that offers policies specifically designed to help electricians. You can get a quote in minutes.
