HVAC Contractors (Heating, Ventilation, and Air Conditioning) perform a variety of work in both residential and commercial projects. You’re a highly trained tradesperson that performs anything from small repairs to a completely new construction project.Every home needs well-maintained air conditioning units and proper ventilation. But it can be a risky business—HVAC employees are in people's homes, moving heavy items, and working with electricity.
There are risks of bodily injury to the employees and damage to your equipment. There are also legal risks involved in servicing people's heating and cooling systems. These risks can be expensive for your company, requiring you to spend a lot on replacing equipment and covering legal fees.
These risks may all feel worth it at a personal level because you own your company and are providing necessary services to people. But it can make protecting your business complicated. That’s why your HVAC company needs to make sure it has a solid insurance program in place to protect both your business and your employees.
What Types Of Coverage Do You Need?
We’ve laid out some of the most important coverages to consider for your HVAC business.
General Liability Insurance
General liability insurance—sometimes referred to as commercial liability—is a good starting point for an HVAC contractor. It covers bodily injury and associated expenses, property damage, and legal costs if you’re sued. For example, a customer's property could get damaged if improper ventilation leads to moisture buildup behind walls. Or perhaps the homeowner is injured while you’re installing an AC unit. You could face a lawsuit and be found liable for claims. Your average general liability policy will cover up to $1,000,000 per claim with an upper limit of $2,000,000. But you can customize your coverage to fit your particular liability needs.
An HVAC contractor needs to have property insurance whether they lease or own the space they operate from for the business. Property insurance will cover the expense of replacing equipment if it is stolen, gets lost, or is damaged in ways specified in your policy. How much your property insurance will cost will depend on what sort of equipment and materials you are insuring. It is often more affordable when bundled as part of a business owners policy.
Business Owner's Policy
A Business Owner's Policy (BOP) is a smart way of insuring your company against many common problems. It is a bundle of insurance policies that you can buy together to cover your business. Often, an HVAC company's BOP will tie general liability and property insurance together. What else will be included in the policy will vary depending on:
- How big your company is
- The type of equipment you use,
- Your legal liability
Professional Liability Insurance
Professional liability (also called professional indemnity insurance or errors and omissions insurance) covers the cost of malpractice cases. If you made a mistake or were negligent professional liability covers those claims.
Inland Marine Insurance
Inland marine covers your tools and equipment while in transit or while stored offsite.
Commercial Auto Insurance
The truck or van for your HVAC company is an integral part of your business, and getting into a car accident could cost you. Commercial auto insurance will cover many of the repairs and any legal fees that may be involved. Your average policy limit for commercial auto insurance is $1,000,000, but this can vary depending on many factors. A big company with a fleet of vans may need something different from an individual buying a used van for his business.
Workers' Compensation Insurance
If your company employs anyone, workers' compensation is highly recommended. Most states require employers to have workers' compensation insurance. Even when it's not legally required, it's a practical requirement. The HVAC repair industry requires a lot of heavy lifting, dealing with electricity, and getting into cramped spaces. This coverage pays employees medical bills and lost wages if there were a job-related injury. It also offers protection to the business from being sued by the employee as a result of that injury.
How Much Does Insurance for HVAC Contractors Cost?
On average, a general liability insurance policy for HVAC contractor insurance costs $700 a year. Addition coverage will likely be an additional cost. Other factors include but aren't limited to:
- The type of installation you do
- size of your business
- number of employees
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