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Q: Why Should Electricians Be Insured?

A basic type of business insurance that electricians need is liability insurance. Professional liability insurance protects the electrician who causes property damage or bodily injury to a client. For example, improperly wired electrical boxes could cause damage to a home entertainment system, and the same error in a customer’s house could cause bodily harm to the customer. In order for an electrician to be licensed as a business, he or she must obtain liability insurance coverage. No savvy customer should hire an electrician who does not have business liability insurance. Electricians who have an employee or employees must get worker’s compensation insurance for the business. That is also legally required coverage for a business.

Q: What Does Business Electrician Insurance Cover?

Business insurance coverage can be broad or specific. The type of coverage varies by the type of policy. Here are details about each type of insurance policy that is required for business purposes:

Q: Are Electricians Legally Required to Carry Business Insurance?

Yes. In order to become licensed, an electrician must have business insurance.

Q: Does Electrical Contractors’ Insurance Cover Employees?

No. An electrical contractor must obtain Worker’s Compensation insurance in order to cover employees. Any small business which has an employee or employees must obtain Worker’s Compensation insurance. It is required by law.

Q: How Much Electrician Liability Insurance Do You Need?

Most policies cover from $500,000 to $1 million and up. An electrician should consider the value of the properties where the work will take place. For example, is the electrician doing work for a shopping complex, large factory, or palatial home? Consider the amount of property damage that may be claimed by the client – who may represent a multi-million dollar project. An electrician can start with a certain amount of liability coverage, and increase that as needed. Although the electrician may be working on a $100,000 home, the cost to replace that home – given the up-to-date cost of materials and labor – could be much higher than the home’s current value or assessment. The policy cost may vary depending on the deductible amount chosen. You can play with the deductible amount and see how much raising that changes the monthly cost. However, often the degree of change in the monthly premium cost isn’t worth it – it’s best to stick with the lowest deductible amount.

Q: Does Business Insurance Differ by State?

Yes, for a couple of reasons. Costs vary in some states, which have a cap on the maximum level of liability that a customer can claim. The cost of Worker’s Compensation may also vary, depending on whether or not it is established by the dollar amount of claims paid. If a state has had a high number of Worker’s Compensation claims, the rate for that insurance will be higher.

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