HVAC Business Insurance

What insurance do HVAC contractors need?

HVAC jobs are hot and cold– literally. One day you’re fixing an AC unit in the 100 degree heat, and the next you’re warming up a home in the dead of winter. And while your main priority is making clients’ residential and commercial spaces comfortable, you need peace of mind as well. We’ll tailor an HVAC insurance plan to fit the risks you face each day. That way, you can be assured you have a good safety net in place in case something bad happens.

You’ll probably want to start with general liability, workers’ comp, and commercial auto insurance.

HVAC Workers’ Comp

If you’re an HVAC contractor, you’re probably aware of how important workers’ comp is. As a refresher, workers’ comp coverage protects business owners and their employees in the event of a workplace injury. Installing and repairing indoor climate control systems comes with physical risks. If you get hurt on the job, you would have to pay for the medical bills and other related expenses. Alternatively, a workers’ comp policy would cover the costs.

Claims examples:

  • You lift a heavy unit and pull a back muscle, causing you to be out of work for two weeks. Your lost wages would be supplemented.
  • You drop the corner of an HVAC unit on your foot, breaking it in two places. Your medical bills would be covered.
  • An employee falls off a ladder and breaks their collar bone. The hospital stay would be taken care of.

Should an employee suffer an injury on the job and you do not have workers’ comp, you can be held liable. Even if you had nothing to do with it, you would be expected to foot the bill. Additionally, if a disgruntled employee chooses to press charges, your court costs, legal fees, and settlements would be covered. That’s pretty great.

Taking time off work due to an injury can be stressful, especially when you’re worrying about your loss of income. Luckily, WC would also supplement your lost wages while you take time to recover.

Workers’ comp benefits HVAC techs in a few more ways. You’ll be protected should you ever face a claim regarding negligence or an unsafe work environment. Lastly, in the unfortunate event you or an employee dies from an accident, the funeral expenses would also be taken care of.

Workers’ comp is definitely one of the most important coverages to consider in a well-rounded HVAC insurance program.

HVAC Liability Insurance

The benefits of general liability insurance span many of the things that can go wrong when you run a business. It helps cover the costs of lawsuits for things like installation issues, property damage (like moisture damage from an improper ventilation job), and injuries to 3rd parties as a result of your operations. Two main benefits include third party property damage and bodily injury coverage.

Claims Examples:

  • Property Damage: If an employee chips an expensive piece of furniture during installation for whatever reason, you’ll be protected from a the repair cost, replacement, or potential lawsuit.
  • Products & Completed Operations: Coverage for products that have been previously sold or work operations that have been previously completed.
  • Bodily injury. Injuries to someone who doesn’t work for you can happen at your warehouse, office, storage location, or job site. There’s a risk someone can get hurt wherever the general public can access your work area.
  • Legal Defenses and Settlements: (including lawyer’s fees, punitive damages, and court expenses) in the event of a lawsuit.
  • Personal/Advertising Injury. Personal injury lawsuits can come from accusations of libel or slander against another person. For example, one of your competitors thinks you used their trademark without authorization.
  • Damage to Rented Premises. Protects you when you lease or rent the property you use for conducting business, in the event that the property is damaged (like from a fire).

HVAC Auto Insurance

You rely on your work vehicle on a daily basis. Not only are you running around town to different residential and commercial spaces, you’re also transporting your tools and equipment. One day you’re working on a regeneration unit in a residential home, and the next day you might be outside of your old high school repairing the heating and air conditioning units. Without your truck or van, you wouldn’t be as efficient, and you definitely wouldn’t be on time.

Business auto insurance protects your work vehicle when you use it for job related purposes. That means work-related errands like going to the bank, running to the hardware store, and even driving to lunch with a client are all covered by this policy. If an accident happens when you’re driving for work related purposes, you will be protected.

How much is commercial auto insurance? HVAC techs might expect to pay somewhere around $2,800 for an annual commercial auto policy.

If you hire, rent, or borrow vehicles for work, or use your personal vehicle for work, you would need hired and non-owned auto insurance. This coverage also provides liability protection if your employees are using their personal vehicle on behalf of your business.

HVAC Property Insurance

You rely on your stuff to do your job. That’s why it’s important to get coverage for your stuff, whether it’s at the main business shop location or carried around to job sites.

Make sure the important tools and equipment you need for installation, repair, and maintenance are covered by a good business property insurance policy. In the event your work equipment gets lost, damaged, or stolen, a commercial property policy will cover replacement and repair costs. Your work premises, office furniture, and electronics will also be covered.

Keep in mind that the coverage ends after you leave the business property. To protect your gear on various job sites and while in transit, you’ll need to consider inland marine insurance.

HVAC Umbrella Insurance

If you have commercial insurance but feel like you need extra protection, you can add umbrella insurance over your other policies. All insurance policies have limits, which means if a claim occurs, they will only pay up to the policy’s limits. Once those limits have been met, you will have to pay the rest of the claim.

To avoid this, many business owners add an umbrella to their policy. If you’re traveling to a jobsite and get into an accident, you may be thinking “oh, well at least I have commercial auto insurance.” That’s great, but let’s say the policy only covers up to $500,000 in damages. Your accident resulted in serious injuries to others, and winds up being a $550,000 claim. Your insurance carrier would pay for the $500,000, but without increased limits, you would have to pay for the remaining $50,000.


HVAC Liability Insurance Cost

The cost of business insurance varies a lot. General liability insurance might cost somewhere between $400 to $1,300/year for many small HVAC businesses.

Check out our HVAC contractor cost guide to learn more.

Liability insurance costs also depend on how much coverage you need, how many employees you have, and how many vehicles you hire or own. The bigger your business gets, the more your insurance will cost — because bigger businesses face more risks and therefore need more protection.

The best way to know exactly how much your plan will cost is to fill out our simple form and compare quotes. And if you’d like more bang for your buck, think about a business owner’s policy. BOP’s combine general liability and commercial property into a packaged deal that costs less than buying each of policy separately. As an HVAC tech, you might expect to pay around $500/year for a BOP.

HVAC Workers’ Comp Cost

The cost of workers’ comp insurance varies on a lot of factors. In particular, your state, your industry, and your number of employees.

State: It’s a state-regulated coverage. Because of this, prices may vary based on where you work. Different states may have had different experiences with industry claims in the past, and that may impact how they choose to rate a type of business. Also, some states require the owner to have coverage, while others do not. (And covering yourself surely impacts the cost of the policy.)

Industry: Different industries face different levels of risk. Therefore, the “classification rate” assigned to your industry will reflect the liability you face. For example, HVAC contractors face physical risks each day on the job. It’s safe to say you would pay more for workers’ comp than an accountant who sits at a desk all day.

Payroll: Your payroll hugely impacts the cost of your workers’ comp insurance. The more employees you have, the more your policy will cost.

Experience Mod: Mods reflect your loss history. An average mod is around 1.00. The more claims you have, the higher your mod. A lot of claims could mean you might pay up to double the price. (A good reason to make focus on safety in the workplace.)

Finally, the expense constant needs to be factored in, which covers administrative fees. This typically costs around $200.

Learn more about about the costs of business insurance:

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