Electrician Liability Insurance: Cost & Coverage for 2023
Electrician insurance is a combination of policies that protects your business against the financial loss from claims of third-party property damage, workplace injuries, damaged business property, or business income loss. General liability insurance is the most common policy for an electrician, but many may need more coverage, such as inland marine for their tools and equipment. Electrical contractors usually pay an annual average of $500 to $1,200 for general liability.
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Electrician Liability Insurance Costs
Providers take a number of details about your business into account when calculating the premium. 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, here are estimated annual premiums averaged from multiple quotes.
Average Annual Premium
$500 to $1,200
$1 million per occurrence, $2 million aggregate
$175 to $540
$5,000 for tools and equipment with $500 deductible
Business Owner’s Policy (BOP)
$670 to $2,660
$1 million per occurrence, $2 million aggregate and $15,000 business personal property with a $500 deductible
$3,450 to $4,800
$300,000 combined single limit for liability
Workers’ compensation is an additional coverage electricians may need. However, the price can vary significantly even within the same industry. This is because the cost of workers’ compensation is calculated using a formula that includes your industry, your claims history, and the number of employees you have.
Specific factors that providers will consider are:
- The size of your business: The number of employees increases the risk for a loss.
- Your experience: How many 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.
Who Needs Electrician Insurance
Individual electricians, or companies employing electricians, need electrician insurance. 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.
Types of Electrician Insurance Coverage
What It Covers
Third-party claims of bodily injury, property damage, and advertising injury
Tools and equipment that move from job site to job site
A combination of general liability, commercial property, and lost business income
Medical bills and wage replacement for employees who become injured or ill as a result of their job
Third-party claims of bodily injury and property damage when your vehicle is at fault; can also have first-party coverage for the vehicle
Due to the risks associated with electrical work, every electrician needs a commercial general liability policy. General liability provides broad liability coverage against claims that, as a result of your work, someone was injured, their property was damaged, or you caused reputational or personal advertising harm.
For example, 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 BOP 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 for 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. For example, Texas doesn’t require workers’ compensation coverage, while other states require coverage only if you have a certain number of workers (more than three is common). Workers’ compensation insurance protects against the risks of an on-the-job injury or death.
In case of injury, workers’ compensation coverage pays for:
- 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.
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 that 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.