Get the Ebook Now. Everything you need to know about Insurance
Regardless of how experienced you are as an electrician contractor, accidents can still happen. This is why an insurance policy is important for everyone in the contractor field, electricians inclusive. With just a relatively small premium each year, the insurance policy will protect your assets from lawsuits for property damage, personal injury etc. arising from an accident.
If you get general liability insurance for example, the cost of damages, settlement fees and also attorney fees will be taken care of by the company offering the insurance cover.
This form of insurance is very important for electrician contractors because they often come in contact with dangerous equipment that can easily lead to debilitating injuries. Also, even the simplest of mistakes while work is in progress can result in fairly costly lawsuits.
So what is the average insurance cost for electrician contractors?
Electrician contractors pay sizeable amounts for insurance than what other business owners pay as a result of the risky nature of the work. For instance, faulty electrical work could lead to damages of appliances in the premises or injuries to people walking into the premises. However, the premium is still very affordable.
On average, an electrician contractor will pay from $700 to $1,200 each year on insurance. Most insurance companies will take the payments in installments paid out over 10 months.
There are a few factors that will be looked at by the company in fixing a rate but the biggest factor is the size of the policy. With an average electrician insurance cover, you will be offered $500,000, $1 million or $2 million worth of coverage. Higher coverage needs translate to more expensive premiums.
Again, the rates will change depending on your state of operation. This is because courts in some states are known to award higher damages in personal injury and property damage cases. Similarly, the track record of your company will be a factor as the company will want to ensure that they are getting the right amount based on the risk your business poses. Basically, record of accidents or lawsuits in the past means you may have to pay 3-4 times the average premium.
How Insurance Works
Insurance is no longer a luxury for electrician contractors. This is because most clients will not allow a contractor to start work on their site without a valid proof of insurance.
With an insurance policy, the cost of the damages or settlement fees as well as the attorney fees will be taken care of but this cannot exceed the policy maximum. So with a $250,000 policy and a $500,000 settlement, you will have to source for the additional a $250,000. This is why electrician contractors handling big projects are advised to pay premium for the highest possible cover. It is always a fraction of what you stand to lose if a lawsuit goes against you!