What insurance do installation contractors insurance need?
As an installation contractor, your work is extremely physical and you’re consistently working at client’s homes and place of business. It would be impossible to install a fence while sitting behind a desk in an ergonomic chair. That one reason why installation contractors need insurance.
A few types of installation contractors we work with:
- Appliance installers
- Cable installers
- Ceiling and wall installers
- Door and window installers
- Drywall installers
- Fence installers
- Flooring installers
- HVAC installers
- Security Installers
- Siding installers
- Solar Installers
- Tile and stone installers
- Window Installers
Installation contractors don’t all face the same risks. Someone installing a new refrigerator doesn’t face the same liabilities as an installation contractor cutting tile on a wet saw. That’s why an independent insurance agent (like us) can help you customize the right insurance plan.
Wondering which insurance coverages are the best for installation contractors? Let’s start with general liability and workers’ compensation insurance.
Installer Liability Insurance
General liability insurance is a broad form of commercial insurance that covers many of the random things that can go wrong while on the job. Here’s the breakdown:
- Property Damage: While installing a new kitchen appliance you place some of your heavy, sharp equipment on the granite countertop. The countertop cracks, and needs to be completely replaced. Luckily, general liability pays for replacement and repair costs.
- Bodily Injury: You’ve hung the drywall at a client’s house and are waiting for the mud to dry. You’ve got fans all over the room with cords running everywhere. The client comes into the room to check on things and trips over one of the cords, fracturing their wrist. Doctor’s visits and medical bills are covered by this policy.
- Personal/Advertising Injury: If you face a claim regarding false advertising, copyright infringement, libel, or slander, you’re protected.
- Legal Defenses and Settlements: Let’s say you install some new siding incorrectly, which causes water damage on the interior of a client’s house. They slap a lawsuit on you. Your general liability policy will cover any legal issues, like court costs and defense fees.
- Completed Operations: Covers liabilities for property damage or injuries to a third party once the work is installed.
Workers’ Comp for Installation Contractors
You don’t wear a suit to the office, and you’re not afraid to get your hands dirty. While accidents can happen at any moment to anyone, the more laborious your job, the greater the likelihood that you may face a workplace injury. Installers can get injured in countless ways, including musculoskeletal strain from heavy lifting, suffering from cuts or puncture wounds that require medical attention, or simply getting injured in slip-and-fall accidents (sometimes from dangerous heights).
Workers’ comp insurance covers you and your employees should an accident happen on the job. Not only does it help you and your team stay safe, it also helps you get hired. In fact, most states require a Certificate of Insurance in order to start working. Even if your state doesn’t require it, oftentimes the hiring party will mandate you show proof of coverage before beginning work.
What does workers’ comp cover?
- Falling Ill from a Work-related Activity: You’re a siding professional, and are working on removing asbestos siding from a client’s home. You fall ill and can’t return to work for a few weeks. Your medical bills will be taken care of.
- Getting Hurt on the Job: You’re an HVAC tech and suffer a ladder fall. You break your collarbone and have to spend some time in the hospital. You won’t have to foot the bill.
- Lost Wages: If you require time off work to recover, your lost wages will be supplemented.
- Employer’s Liability: If an employee files a claim regarding failure to provide a safe work environment, attorney’s fees, settlements, and other court costs will be covered.
- Employee Lawsuits: Should you face an employee lawsuit regarding lost wages or medical expenses, you will be protected.
- Completed Operations: Covers a contractors liability for property damage or injuries to a third party once the work is done.
Additional Insurance Coverages
There are some additional policies that are a good fit for installation contractors, like commercial property, inland marine, commercial auto, and umbrella insurance.
You need tools and equipment to get your job done. And tools, equipment, inventory, and other work gear can come with a hefty price tag.
To protect your business items, you’ll need business property insurance. This policy protects your items while on your business premises, the premises itself, and other contents inside like furniture and electronics.
Should you face a loss like fire, theft, vandalism, or other natural disasters, the replacement and/or repair costs are covered by this policy.
Commercial property insurance is a great coverage to have, but once you’re 500 feet off your business premises, the coverage ends. You have to go to job sites to complete your duties, you can’t stay at your business premises all day. That’s where inland marine insurance comes in.
Sometimes a little extra protection never hurts. That’s exactly what an umbrella policy was made for. It’s an added layer of coverage on top of an existing policy that you already have.
Let’s use commercial auto as an example. Typical policy limits are $500,000. Policy liability limits refer to the amount the insurance carrier is going to pay for a claim. Once the limit has met, you are expected to pay the remaining cost.
So you get into an accident that results in a $600,000 claim. Your carrier will pay the $500,000, and if you have an umbrella policy, it will cover the additional $100,000. Much better than footing the bill personally!
Installation Insurance Costs
It depends on what type of installation you do. A flooring installation contractor might pay around $445 per year for a liability policy, while an HVAC tech might pay $850 for an annual policy.
The cost of liability insurance also varies on how much coverage you need, your location, and how much you interact with the public. The more you meet in person with clients, the greater liability you face.
Looking to save? How about a business owner’s policy, or BOP? BOPs combine general liability insurance and commercial property insurance into a packaged deal. With a BOP, you get more coverage, and at a lower price than purchasing each policy on their own. Score!
Workers’ Comp Costs
The main price factors in calculating the cost of workers’ compensation are as follows:
- Your State: Workers’ compensation insurance is individually regulated by each state. Considering all states have different rules and regulations, the cost of the policy varies by location. One of the main cost differences is if your state requires you to include yourself in coverage or not. Some states just mandate the employees have coverage, while others require the business owner too, as well. Obviously, if you are covered, the price will be higher compared to if you were excluded.
- Your Profession: All jobs face different risks, and workers’ compensation is all about risk. The more liability you face, the greater your classification rate.
- Your Number of Employees: The price of workers’ comp is calculated based on your payroll, so the higher your payroll, the higher the cost of your policy.
- Your Claims History: The next price factor is your history with claims. Have you had any losses? No? Great! Your experience modifier, or mod, should be around a 1.0. That’s right where you want to be. But if you’ve had claims in the past, your mod will raise. You want to avoid having a high mod because it’s also going to be multiplied by the classification rate and the “payroll per $100”. If your mod is 2.0, that means you’re paying double for your workers’ comp policy.
Finally, you’ve got the expense constant. This covers administrative fees, and tends to cost around $200.
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