As an electrical contractor, you know that homes and businesses can only turn their lights on if they have the right circuits installed. And they can only keep their lights on by maintaining a safe, continuous current over time. Whether you’re helping a client with wiring woes or laying the groundwork in a brand-new development, your expertise makes lightbulb moments happen.
As satisfying as it is to see your clients’ eyes light up when they flip the switch for the first time, electrical contracting work is not without its fair share of substantial risks. Client disputes and unfortunate accidents can easily threaten everything you’ve worked toward. Luckily, business insurance for electrical contractors can help protect your operation against financial losses stemming from these risks.
But which kinds of commercial insurance do you need as an electrical contractor? Keep reading to learn more about five scenarios that could be devastating to your finances and reputation without the right policies in place.
You lose a high-profile contract because you’re not properly insured
You just got done pitching a client and submitting what you think is a competitive bid. It seems like you have it in the bag when you get the call that they’re going with a competitor. Why? You don’t have sufficient general liability coverage, which means it’s simply too risky for reputable clients to work with you.
Commercial general liability insurance guards your business operations against financial loss in case you’re found liable for property damage or personal injury to others. Without it, your business may be on the hook for paying legal, medical and compensatory damages from random worksite accidents!
A client alleges you short circuited their building, costing them money
A few days after you wrap up a challenging job on a new restaurant, you get an unfortunate call that the power cut out during their grand opening. Not only did the owners have to apologize and offer a refund to every diner, but they had to throw away all the thawed food inside their industrial refrigerator and freezer as a result. Since you were the last professional to work on their electrical system, they’re holding you accountable for the bill.
Professional liability insurance protects workers “against liability incurred as a result of errors and omissions in performing their professional services.” If your professional work leads to losses for your client, this type of insurance—often called errors and omissions coverage—will help you avoid absorbing such a staggering financial burden.
Your employee falls off a ladder completing a difficult-to-reach job
Your team follows a long list of precautionary safety measures, but accidents happen. In this case, your employee falls off a ladder. You need workers compensation coverage to pay for their injuries, not to mention any subsequent physical rehabilitation or time off from work.
You rear-end another vehicle while driving your company truck
Unpredictable traffic patterns can get the best of any driver. One day, while cutting it close between appointments, you rear-end another vehicle. Without commercial auto insurance, one small accident could end up costing your company big time. Business auto insurance includes at least liability insurance to pay for injuries and damages you cause to others in your commercial vehicle, but can also include comprehensive and collision coverage to further protect your assets.
After a contract dispute, a client refuses to pay their bill in full
Sometimes, client relations don’t go as expected. One Maryland-based electrical contractor alleges that after working non-stop to get the Washington D.C.-based Trump Hotel ready for its grand opening, the client failed to pay over two million dollars of the bill, as NBC News reports .
What if you don’t have the resources to wait for a lengthy court settlement to get your money? Business interruption coverage, part of a Business Owners Policy (BOP), can help keep your business running despite temporary disruptions to your income. Client disputes and property damage are two examples of situations that could shutter your operations without it.
Want to learn more about business insurance for electrical contractors? Find the answers and quotes you need with CoverHound!