WorldExecutivesDigest.com | 7 Types of Insurance your HVAC Business Needs | Insurance is something we all must have but never hope to use. As an HVAC business, unfortunately, there are all sorts of risks and many different line items that need coverage.
From your own equipment to another contractor’s equipment to a homeowner’s property to other people who are on the job or impacted by your work, it’s important that you purchase insurance policies that keep your business protected on all fronts.
Here are seven different types of insurance your HVAC business needs to have in place.
1. Business Owner’s Policy
All business owners, often regardless of industry or niche, should purchase a business owner’s policy. This goes for your HVAC business, too!
This policy is unlikely to address and cover all of your insurance needs; but it creates a fantastic starting point and springboard for some of the different types of coverage you will need to consider.
Most business owner’s policies (BOPs) offer three different types of coverage. To start, business property insurance will cover the costs associated with property or equipment damage sustained during a specific event.
Business interruption coverage will provide your business during an event that causes you to need to temporarily close your doors.
In a business owner’s policy, general liability insurance is unlikely to cover all of your needs during a time when you may need general liability protection, but it often provides enough coverage to meet basic requirements.
2. Business Property and Equipment Insurance
As an HVAC contractor, you’ve likely invested quite a bit of money in professional HVAC equipment that helps your crew perform the work from day to day.
You want to make sure that your own equipment is protected — not only because you’ll need to recoup your costs in the event that property is damaged but also because you’ll need to get access to new equipment quickly.
This way, your business won’t come to a screeching halt while a claim is being processed or while your damaged property is being repaired.
3. Commercial General Liability Insurance
If other people are injured or if their property is damaged as a result of your HVAC work, you’re going to need commercial general liability insurance.
Not only will this help cover costs associated with the actual damages if it turns out that your business is, in fact, at fault, but also court costs when there are lawsuits involved.
Of course, commercial general liability insurance is often included in a business owner’s policy; but a standalone commercial general liability policy is likely to offer greater coverage.
4. Professional Liability Insurance
Sometimes the work doesn’t go according to plan. However rare it may be, there may be circumstances when you or a crew member makes a mistake while performing the work — a mistake that damages your business’s reputation or ends up in a lawsuit.
With professional liability insurance, many of the costs you incur as a result — such as attorney fees and judgments — will be covered.
5. Workers Compensation Insurance
In an industry like construction, you need to be mindful that injuries occurring on site are not exactly infrequent. In fact, the construction industry saw 77,490 nonfatal injuries and 1,008 fatal injuries in 2018 alone.
God forbid that any of your employees sustain injuries while on site, workers compensation insurance will help cover medical costs and payroll costs — expenses that, depending on the injury, can turn out to be extremely costly to your HVAC business.
6. Commercial Auto Insurance
Chances are that your HVAC business uses company vehicles to make travel between various points, whether it’s to and from customer offices, job sites, or homes.
Our minds go to vehicles being damaged on job sites, but these are far from the only incidents that can occur. Even parked at your company’s office, one of your vehicles could easily be broken into or stolen.
Having commercial auto insurance in place will help protect your property against these situations.
7. Umbrella Liability Insurance
If you’re out quite a bit of money as a result of a judgment against your business, you may not have enough coverage from insurance policies to fully take care of the costs you incur.
For this type of scenario, having umbrella liability insurance will help you make up the difference and further mitigate your business’s financial responsibility.
An HVAC business can expect to pay just $500 – $1,000 annually for up to $1 million in extra coverage. This works out to be a fairly affordable expense, particularly if you ever end up needing to use it!
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