Do you need the best HVAC business insurance coverage? If YES, here is how much it cost to get insurance for HVAC contractors from the top insurance providers.
Heating and ventilation are important in buildings as buildings that are not properly heated or properly ventilated can pose health risks. This is one of the reasons why heating, ventilation and air condition contractors are very important in the construction industry. The job description of HVAC contractors is related primarily to heating and air conditioning.
This set of builders are responsible for installing, repairing, or maintaining air conditioning units, heating units, and ventilation in homes and business concerns. As a heating and air conditioning contractor, you are expected to be qualified and trained before you can set up your business and start carrying out your duties.
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Why Get Insurance Coverage as a HVAC Business Owner or Contractor?
One of the requirements to fully set up your business is to get insurance. This is because the HVAC business comes with a lot of risks. With this profession, your liability risks range from making a mistake while rendering repairs to harming yourself or your employees while performing HVAC services. Heating, ventilation and air conditioning contractors insurance will help protect you from these and other risks.
Again, as a HVAC contractor, getting insurance for your business would also make you viable in the market because some building contractors would never hire a HVAC contractor that does not have insurance. For these reasons, it is now clear that insurance is not something you can do without in your business, the law would not even allow you to set up in the first place.
If you are a new HVAC contractor, and you are trying to get insurance for your business, there are few things you have to know before you proceed. In this article, we would be telling you about the insurance coverage your business needs, how much the coverage costs and which insurance companies would better serve you in this regard in the United States.
9 Best Insurance Coverage for HVAC Businesses and HVAC Contractors?
There are quite a number of insurance policies HVAC contractors need to take out for the sake for their business and the life of their employees and themselves. These policies may include;
i. HVAC Contractor General Liability Insurance
A variety of risks are associated with running a heating and air conditioning business. For this reason, the contractor needs to take out a HVAC contractor general liability insurance policy. When you purchase a general liability insurance, your business would be protected from a lot of liabilities.
Included in your general liability policy is the coverage for completed operations, products liability, and premises liability. For instance, if your client gets wounded by the repairs you completed, the costs associated are covered by completed operations.
In the area of Products liability, this coverage protects you from any products you sell your clients, such as a cleaning agent that caused an allergic reaction. With premises liability, you’re protected against bodily injury that might occur in your office.
ii. HVAC Contractor Commercial Auto Insurance
Another major insurance protection your HVAC business needs is the commercial auto insurance. The majority of your work as a heating and A/C contractor is done at client’s homes or businesses. This means that you use a company vehicle to drive to your job posts, and this vehicle should be covered by commercial auto insurance.
A commercial auto insurance policy provides ample coverage for your company vehicle in the event of an accident. It will provide coverage against bodily or property injury, as well as vandalism or theft. Damage to your vehicle can low you down on a business day that is why this coverage is very necessary.
iii. HVAC Surety Bond Requirements
Another thing your insurance company can provide you apart from insurance is your HVAC surety bonds. To obtain and maintain state board licensing as an HVAC technician, most states require at least a $15,000 surety bond. Surety bonds are sold in specialty divisions of insurance companies but are not insurance.
But for businesses that cannot afford these bonds, they require the help of insurance companies The bond is paid in a claim and then the insurance carrier recoups the money from the HVAC technician.
State boards use surety bonds to protect consumers without creating huge expenses for licensed tradesmen. It is unlike insurance where a more costly premium is paid and the insurance company pays claims without recouping the claim value.
iv. HVAC Contractor Inland Marine Insurance
Inland marine insurance is a special type of insurance policy that protects property while it is in transit. This means that while you are driving to a client’s residence or place of business, your property and theirs is protected.
Any type of accident or theft can occur between the time you drive to the client’s home or business, as well as when you’re making repairs. If something was to be damaged or stolen, the losses are covered by inland marine coverage. This is yet another must-have insurance policy for your HVAC business.
v. HVAC Contractor Employee Dishonesty Insurance
Another insurance you can look to having in your business is the employee dishonesty insurance. Employee dishonesty insurance will insure your heating and air conditioning contractor company against crimes committed by your employees.
This may include theft of money or tools and equipment you use, along with theft or vandalism committed at a client’s home or business. It is an unfortunate thing but as a business owner you will have to deal with it so it is better that you protect yourself from it from the start, rather than grappling with the aftermath.
vi. Errors and Omissions Insurance
Errors and omissions (E&O) insurance covers your HVAC business from any liability related to your recommendations as a professional HVAC technician. It is sometimes referred to as professional liability insurance. Something as small as not properly sealing a duct could lead to mold, causing occupant health problems and building damage requiring expensive remediation.
Errors and omissions insurance is a nice addition to your total insurance coverage on top of general liability, especially if you employ other technicians and aren’t always supervising the work.
vii. HVAC Contractor Workers’ Compensation
If you have at least one employee working for your heating, ventilation and air conditioning company, you need to get worker’s compensation insurance. Not only is it legally required in most states, but it is an important way to protect your employees and your company.
Worker’s comp protects against work-related injuries or illness. For example, if a worker is installing a new A/C unit in a client’s home, and due to a water leak, deals with an electrical shock, their injuries and other medical costs are covered. Your company also won’t have to deal with a lawsuit or medical costs.
If you are found negligent or you purposely create an unsafe working environment, you might still be vulnerable to lawsuits even with adequate coverage. However, as long as you meet OSHA requirements, then your workers’ comp policy should protect you against liability for the injuries or illnesses that happen to your employees.
Your workers compensation insurance covers any on-the-job injury or illness. This includes when your employees are on other premises for the job, such as when they visit clients or drive for business purposes. Common instances covered by this insurance include:
- Trips and falls
- Equipment or machinery
- Overexertion, sprains and strains
- Repetitive motion injuries (i.e. carpal tunnel syndrome or back pain)
- Sick building syndrome
- Mold exposure
To be eligible for workers’ compensation insurance coverage, the illness or injury must have a direct link to the employee’s job. But note that the same injury or illness may not have the same coverage, since the situation matters.
viii. HVAC Contractor Umbrella Insurance
Yet another insurance policy that would be good for your HVAC business is the HVAC contractor Umbrella insurance. This is because the liability policies for your Heating, ventilation and air conditioning Contractors business (General Liability, Commercial Auto, and Employers Liability) all have coverage limits.
Umbrella liability insurance therefore is used to increase your liability limits for all of these risks under one policy to protect your business for claims that exceed your primary policy limits. Depending on the scale of your business, you may need need to also take on this insurance policy.
ix. HVAC Technician Insurance
HVAC technician insurance is also another insurance that can protect your business from common risks that could result in injuries or property damage ending in financial losses. These costly mishaps can even put your business at risk if you don’t have adequate coverage.
How to Apply and Get HVAC Insurance for your Business
- Research the HVAC Insurance company as well as the Coverage you want to buy
Before you get an insurance policy for your HVAC business, the first thing you need to do is to ask around about the coverage you seek. This process involves inquiring of each insurance company about the specific insurance you need, including their deductibles and premiums. Be sure to confirm that the policies you are being offered cover HVAC insurance claims specifically. You should know that some insurance carriers cover some contractors while others do not.
You can use a broker or go directly to the carrier by yourself to make your findings. Brokers work with many carriers and shop around on your behalf to find the right insurance for an HVAC business in your area. They may also be able to get you bundles or discounts is you negotiate well with them.
- Make your application
If you have sought out the ideal insurance company for your business, the next thing you have to do is send out an application. The application is the start of the underwriting process. The insurance company needs to understand how to insure your HVAC business.
Whether online or over the phone, the application requires that you provide some business information such as logistic information for jobs and the financial base of your company. They’ll also need licensing and business experience information from you.
Some information you need to prepare ahead of time include:
- Revenue of the company
- Number of employees
- Driving records or driver’s license for everyone driving company vehicles
- Explanation of your business and nature of work
- Negotiate Insurance Terms
The next step to take when applying for your HVAC insurance is to negotiate terms with your chosen insurance company. Note that no rule says that you must take the initial terms the company puts out. Negotiating terms is not haggling over price.
Insurance carriers have to follow very specific underwriting risk assessment guidelines. But you can negotiate the options being offered. Consider the limits of coverage and ask about increase and decreases. While equipment limits often have a large impact on price, liability is usually negligible to overall pricing.
Every policy has more than one type of coverage itemized in it. Many of these coverages can be increased or decreased, and sometimes even waived. Go over every line item of coverage to understand what it covers and make sure you are paying for what is really important to your business. For example, if you were quoted $20,000 for business property but really only need $10,000 in coverage, speak up, so you can save money.
- Sign Documentation
Once you have settle on appreciable insurance terms with the company, and if you have fulfilled your own terms of the business, the only thing that is left is for you to sign the documentation. Once you put your name paper, you’ll be covered and ready to use your insurance as needed.
Carriers will vary on payment terms. Some won’t bind coverage, meaning make it effective, until the first payment is made. Others will bill you for the first premium while still binding coverage.
5. Re-assess your coverage every year
Your business with your insurance policy doesn’t just end after you have gotten the policy. You must endeavor to review the policy annually and inform your insurance agent about any new equipment purchases or new drivers. Any changes in your operations, such as expanding and purchasing or replacing equipment, mean that you should check with your agent to discuss how these alterations affect your coverage.
This could dramatically affect coverage and premium costs. Use your insurance agent as a partner to help keep your business protected against financial threats that naturally arise in claims and accusations.
How Much Does It Cost to Get HVAC Insurance for your Business?
No two businesses are identical, so you can expect your HVAC insurance cost to be different from other heating, ventilation and air conditioning companies. Common factors that influence your cost include your claims history, coverage needs and level of exposure, to name a few.
But that aside, there are certain averages that HVAC businesses tend to pin their insurance policy costs to. We would attempt to show some of the average insurance policy costs in the industry. You must note here that these numbers are only estimated and not the real thing. Your actual premiums might be higher or lower.
a. General Liability Insurance
General Liability Insurance is one of the most basic insurance policies – and among the most important for HVAC companies. This is because this insurance covers property damage, moisture damage, installation problems, and injuries caused by your work. General Liability Insurance typically costs between $398 and $1,204 for HVAC service techs.
- Median policy premium: $398 – $1,204
- Per claim limit: $1,000,000
- Policy limit: $2,000,000
- Median policy deductible:$1,000
b. Business Owner’s Policy
A Business Owner’s Policy bundles General Liability with Property Insurance, making it a smart way for HVAC professionals to get a discount on two important insurance coverages. The typical BOP starts at $500 for HVAC companies.
- Median policy premium: $500
- Per claim limit: $1,000,000
- Policy limit: $2,000,000
- Median policy deductible: $500
c. Commercial Auto Insurance
One of the signature items for any HVAC professional is their truck or van. Not only does it help you get from place to place, but by painting your logo and contact information to it, you can market your company without doing much work.
Commercial Auto Insurance protects your business from the cost of auto accidents, including legal expenses and repairs. To cover your HVAC business, Commercial Auto Insurance typically costs $1,267 to $4,199.
- Median policy premium: $1,267 – $4,199
- Median policy limit: $1,000,000
- Median policy deductible: $500
d. Workers’ Compensation Insurance
Almost every state requires HVAC employers to have Workers’ Compensation Insurance. Because of the physical nature of your work, Workers’ Comp is important for protecting you from on-the-job injuries, lawsuits, and settlements. HVAC companies can pay anywhere from $391 to $9,061 in Workers’ Comp premiums.
- Median policy premium: $391 – $9,061
- Per claim limit: $500,000
- Median policy limit: $500,000
e. HVAC umbrella liability insurance
Umbrella insurance extends other liability coverages, providing more protection than existing underlying policy limits. Most umbrella policies will require minimum limits of at least $250,000 on commercial auto and $1 million on liability for commercial umbrella insurance eligibility. For an extra $1 million per claim, HVAC insurance umbrella coverage costs $500 to $1,000 annually.
4 Factors That Influence the Cost of your HVAC Insurance
It has been said before that no HVAC companies carry the same insurance. The coverage rates do vary based on several factors that are peculiar to your business. Some of these factors may include;
- The length of time your company has been operational: One thing that expressly affects the insurance your HVAC business carries is the length of time your company has been operational. If an HVAC contracting company has been in the business a long time and has a relatively clean accident record, their insurance quote is likely to be lower. As customers assess the risk associated with younger companies untested by time, so do insurance companies.
- The accident history of your company: Accidents happen, otherwise there’d be no need for insurance at all. However, if your company has a track record of having many accidents over a short period of time, it’s likely you’ll receive a higher rate, a lower limit, or both.
- Your company’s Credit History: Another factor insurance companies look out for is how your company has been able to manage its credit. Low scores tell insurance providers that your company’s ability to pay month-to-month or quarter-to-quarter is unreliable, which can affect your ability to even receive a policy in the first place.
- The employees you hire: Yet another thing insurance companies can judge you with is the caliber of employees you hire for your business. Insurance agencies consider how well your employees have been trained, where they went to vocational school, the current age of your employees, how long they’ve been in business and their individual histories.
But one thing you have to note here is that just because insurance companies consider these factors, doesn’t mean every approach to these factors is shared by every company out there. Your needs, your background, and your history make your company and every other company out there unique.
11 Top HVAC Insurance Providers in the USA
- AP Intego
AP Intego is one of the leading insurance companies in the United States where you can get your HVAC insurance. This insurance company offers you the ability to work with licensed agents, and to shop and compare multiple HVAC insurance quotes from industry leading companies, such as Travelers.
AP Intego helps small businesses get matched with the right insurance policy for an affordable price. The pay-as-you-go option and workers’ compensation payroll integration keep costs accurate and timely.
Another popular name in the HVAC insurance industry is Insureon. The company gives insurance to businesses specializing in heating and cooling or refrigeration repair. The company prides itself on having specialist HVAC business insurance specialist agents that understand the unique risks of the industry.
On their website, they wrote that they have helped hundreds of other heating and cooling businesses weather unexpected accidents, events, and natural disasters. “Our longstanding relationships with top-tier insurance providers allow us to offer policies designed to protect heating, ventilation, and cooling technicians at an affordable rate.”
CoverWallet is an established insurance provider that offers policies that are specific to certain types of industries, including HVAC businesses. No matter the size of the business — from a solopreneur running the show by themselves to a growing company with several HVAC technicians and a fleet — CoverWallet takes their risks into consideration when providing personalized coverage.
CoverWallet’s specialty is getting affordable insurance to small businesses fast. You can visit its easy-to-navigate website and submit a simple online application to get instant approval. An insurance certificate is accessible as soon as you purchase coverage. They also offer competitive rates, allowing you to get HVAC business insurance for as little as $39/month.
- Contractors Liability
Contractors liability is another insurance company where you can purchase reliable HVAC insurance. They offer products from insurance including, workers compensation, commercial vehicle insurance to surety bonds and more. This company has the goal of being a trusted insurance advisor, to deliver great customer service and provide excellent value.
If you’re working with heating, air conditioning, and refrigeration, you may need insurance to stay legally licensed and meet the requirements of your clients, and one of the companies you can look out for insurance is Hiscox.
The company boasts of offering businesses the opportunity to take advantage of lower premiums and risk management rewards for following good business practices. The cost they offer vary depending on the size and type of your business and various risk factors.
Hiscox is an insurance carrier not concerned with balancing personal and commercial lines of insurance. This carrier focuses on the needs of small businesses and only small businesses. By tailoring policies to meet the needs of industry and business-size risks, Hiscox is able to keep costs down for business owners.
Hiscox is perfectly suited for the independent contractor or small business with a crew of five or less. Their sweet spot is with home-based businesses, providing equipment protection without the extensive cost requirements of leased buildings.
- USA Business insurance
This is another effective provider of HVAC insurance and they are available in most states of the United states, and they are still expanding.
GuideOne is another insurance company you can start looking at their quotes if you need HVAC insurance in the United States. They claim to operate a little differently than most insurers — “we don’t work for customers, we work with them, because the work they do is so vital to the strength of our communities.”
GuideOne operates in all 50 states through a network of thousands of independent agents who serve more than 51,000 commercial policyholders.
Insurance321 is a broker without the high expense of broker fees. Insurance321 searches the market for top-rated partner insurance carriers using one application. Business owners provide information once and the best policy is provided.
Insurance321 is a good choice for a business owner who is unsure if he should have all policies with one carrier. Some companies are much more competitive on commercial auto than others, while some excel in professional liability. Insurance321 claims to help you shift through the noise.
Nationwide is a national insurance carrier offering personal and commercial insurance policies. The company has several options for licensed contractors, making sure risk categories meet the right cost factors. Nationwide offers liability, business auto, workers’ compensation, and professional liability.
Nationwide has the ability to work with HVAC contractors and companies of all levels, but their sweet spot is with small independent contractors working in local residential areas. Being able to choose personal auto for business pursuits helps HVAC business owners reduce costs with proper coverage.
- Acuity Insurance
Acuity insurance is another insurance provider that can help you out if you are on the look out for a good HVAC insurance company. The company provides industry-specific training to all their underwriters, loss control representatives, and claims adjusters, so they can give clients the support they need and deserve.
Additionally, the company enables you get get your certificates of insurance online, freeing you from hassle and worry. They have been insuring contractors for over 45 years and employ in-house staff who study issues affecting the construction industry.
- Webb Insurance
Webb Insurance is a family-owned, multiple line insurance broker, offering numerous types of insurance for businesses and individuals, including HVAC companies. Located in midtown St. Charles, Webb Insurance has been serving the greater St. Charles and St. Louis areas for more than 35 years. They offer a small-town atmosphere without the “slow” small-town pace.
The company provides a variety of coverage options for your most-valued personal investments, including car, boat and motorcycle insurance, homeowners’ insurance, umbrella liability insurance, and more. They can equally provide coverage in all states in the USA.
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