Whether it’s the dangers of working with electricity or the simple possibility of your apprentice forgetting to lock the van filled with $50,000 in equipment. The bottom line is this: if you’re an electrician, it’s crucial to have the right insurance coverage to protect your worksite, your employees, your property, your clients and ultimately, your business.
Here is everything you need to know about electrical contractors insurance for contractors working in California.
Who Needs Electrical Contractors Insurance in California?
Any business that provides electrical contracting services in California needs to have insurance coverage. T
his includes electricians, electrical contractors, and businesses that install, repair, or maintain electrical systems. California law requires electrical contractors to carry workers’ compensation insurance, and other types of insurance coverage may be required by clients or contracts.
What Insurance Do I Need To Do Electrician Work?
General Liability Insurance: Protection for Third-Party Claims
General liability insurance is necessary in order to get your CSLB contractor license. It covers third-party claims of bodily injury or property damage – so even if it wasn’t required, it’s something you’d definitely want to have!
General liability covers, well, all liabilities that may occur on your job site. For example, if a client slips and falls on your job site or a customer’s property is damaged during a project, general liability insurance will cover the costs associated with these types of claims.
Workers’ Compensation Insurance: Protection for Injured Employees
Workers’ compensation insurance is required in most states, including California, in order to do any construction work. Workers’ Comp, as you probably know it, provides coverage for employees who are injured on the job.
As an electrical contractor, your employees face significant risks every day, and workers’ compensation insurance is essential to protect both your business and your employees. This coverage includes medical expenses, lost wages, and rehabilitation costs.
Additional Insurance You Might Want As A Contractor
Professional Liability Insurance: Coverage for Claims Related to Your Services
Professional liability insurance, also known as errors and omissions insurance, provides coverage for claims related to your professional services.
As an electrical contractor, this could include claims related to faulty wiring or improperly installed electrical systems. Professional liability insurance will cover the cost of legal fees, damages, and settlements associated with these types of claims.
Commercial Auto Insurance: Protection for Vehicles Used for Work
If your business uses vehicles for work-related tasks – which is almost a certainty as an electrician – you’ll need commercial auto insurance.
This coverage provides protection for your vehicles in the event of an accident or theft. It also covers liability claims if one of your employees is involved in an accident while driving a company vehicle. This coverage is particularly important for electrical contractors who transport equipment to job sites.
Property Insurance: Coverage for Physical Assets
Property insurance provides coverage for your business’s physical assets, including your office, equipment, and inventory. As an electrical contractor, your equipment is a critical component of your business, and you need to protect it from theft, fire, and other disasters.
This coverage will also protect your business if your equipment is damaged or stolen while in transit, or if your pliers are dropped down an elevator shaft by your apprentice, disappearing forever. The worst!
Umbrella Insurance: Additional Liability Coverage
Umbrella insurance provides additional liability coverage beyond the limits of your other insurance policies. This type of insurance is essential for electrical contractors who face a higher risk of liability claims. Umbrella insurance can provide additional coverage for bodily injury, property damage, and other claims that exceed the limits of your other insurance policies.
H1: How Much Coverage Do I Need?
To operate legally as an electrical contractor in California, you need to meet the minimum coverage requirements for both your General Liability and Workers’ Comp Insurance
CSLB General Liability Coverage Insurance Minimum Requirements
According to the CSLB’s insurance requirements, All electrical contractors in California must carry general liability insurance with a minimum coverage amount of $1 million per occurrence and $2 million aggregate.
CSLB Workers’ Compensation Insurance Minimum Requirements
If you have employees, California law requires you to carry workers’ compensation insurance with a minimum coverage amount of $1 million per occurrence.
It is possible to get an exemption from holding Workers’ Comp insurance. To learn more, go to the CSLB’s Forms and Applications page: https://www.cslb.ca.gov/About_Us/Library/Forms_And_Applications.aspx
How Much Does Insurance Cost For Electrical Contractors?
The costs of insurance coverage for electrical contractors in California can vary widely based on a variety of factors, including the size of your business, the types of projects you work on, and the level of coverage you need. Here’s a breakdown of the potential costs associated with each policy:
General Liability Insurance
The cost of general liability insurance for electrical contractors in California typically ranges from $400 to $1,500 per year, depending on your business’s size and risk level. In general, the smaller your jobs are, the less your general liability insurance will cost.
Workers’ Compensation Insurance
The cost of workers’ compensation insurance for electrical contractors in California can vary widely based on factors such as your payroll, industry classification, and claims history.
The average cost of workers’ compensation insurance in California is approximately $2 per $100 of payroll.
Commercial Auto Insurance
The cost of commercial auto insurance for electrical contractors in California depends on factors such as the number of vehicles you own, the types of vehicles, and the level of coverage you need. On average, commercial auto insurance in California costs around $1,200 per year per vehicle.
As an electrical contractor in California, it’s essential to understand the state’s insurance requirements and the potential costs associated with each policy. Not only are you required to have certain insurance to even get a CSLB contractor license and do work as an electrician in California, you can protect your business and your livelihood by indemnifying your property and jobsite.
Remember to factor in the potential costs of insurance coverage when budgeting for your business and utilize available resources to find the best coverage at a price that works for you.
Running a business is stressful enough without worrying about unexpected events that can lead to financial loss. Having the right insurance coverage provides peace of mind knowing that your business is protected from unforeseen events.