HVAC contractors need to understand the different types of insurance policies available. General liability protects a business from claims of third-party injury or property damage that may occur while a company works on a client’s site. Some policies have additional coverages like product-completed operations, which cover damage to equipment after work is done.
General Liability
Having general liability insurance for HVAC companies is the foundation of any business. This policy will cover the costs of a lawsuit should someone be injured on the job site or if property is damaged. The cost of this insurance is relatively low.
Another HVAC insurance coverage you should consider is professional liability insurance or errors and omissions insurance. This will cover the costs of legal fees and settlements should a client sue your business over improper advice or artistry.
Commercial auto insurance is also necessary if you own a fleet of vans and trucks to transport your employees and tools. This policy covers damages and injury caused by your employees in company-owned vehicles and any damage to a rented space. Umbrella insurance is an optional add-on that will increase your policy limits to help pay for significant liability incidents. This coverage typically works in tandem with general liability and commercial auto policies.
Property Insurance
Property coverage pays for damage to your building and household contents. It also usually covers any leased property you are contractually obligated to insure and the personal property of others in your care, custody, or control to the extent that you are legally liable. You can usually add an endorsement for spoiled inventory to your BOP if you sell supplies, raw materials, or other items that require controlled temperature and humidity conditions for preservation.
The broad form (HO-2) property insurance offers more protection than a standard homeowners policy. It typically covers your dwelling and other structures on the premises at a limit equal to 10% of the dwelling coverage limit, as well as the contents of the home.
The policy covers damage caused by perils such as lightning, fire, hailstorms, windstorms, civil disturbances, vandalism, and aircraft or vehicle damage. It also includes sudden and accidental overflow of steam or water and freezing of household systems, like heating, air conditioning, and plumbing. Property coverage is available in two options: actual cash value and replacement cost.
Equipment Coverage
If judgments or legal fees exceed your general or professional liability insurance limits, umbrella insurance is an optional HVAC business insurance policy that provides additional protection. This allows your company to continue to operate without worrying about the financial impact of a significant accident or lawsuit.
Commercial property insurance for HVAC companies protects the value of equipment and supplies stored on the company’s leased or owned premises from damage due to fire, natural disasters, or theft. A standard business owner’s policy or BOP bundle often includes this.
Most states require that HVAC businesses with employees carry workers’ compensation insurance. If an employee is injured, this helps pay for medical bills and lost wages. It may also provide coverage for legal fees if a worker is sued by an angry client over work-related issues. Many states offer discounts for bundled policies. This is often an economical option for small-to-medium-sized business owners.
Commercial Auto Insurance
Commercial auto insurance is similar to personal auto insurance but for business-owned vehicles. It offers liability, collision, comprehensive, and medical payment coverage. It can also include specialized options like motor truck cargo, rental reimbursement with downtime, and hired and non-owned auto coverage (which provides liability protection for cars or trucks that your company rents, hires, or borrows, as well as those used occasionally by employees on work errands, but not covered under their policies).
Whether grabbing coffee and doughnuts for the team before a meeting, driving clients to multiple locations in a day, or hauling tools and equipment to the construction site, commercial auto insurance helps ensure your business is protected on the road. Talk to a knowledgeable insurance professional about your specific needs. Many business owners have found that they need more than the minimum required by law. That’s why discussing your options with a skilled insurance agent is essential.
