Self-employed electricians and large electrical contracting companies literally power the world. Without them, we would have no lights at night, no refrigeration for our food, no air-conditioning in the hot summer, no heat in the cold winter, and none of the other creature comforts that we’ve come to love.

If you own your own electrical business (meaning you don’t work as an hourly employee for another company), then you need to have electrical business insurance. In today’s post, we’re going to take an in-depth look at electrician insurance and electrical company insurance, why you need it, what type of coverage you need, and how much will business insurance for electricians cost you! Let's deep-dive!

Electrician Liability Insurance: Why You Need It

Electricity is not something to take lightly. One small error can result in a fire, devastating financial loss, and even death. That being said, general liability insurance policy for electricians and electrical companies is a vital aspect of your business that should not be overlooked.

Electrician liability insurance covers everything from simple accidents (like accidentally breaking the light in a client’s home) to worst-case scenarios (like electrical fires or someone getting electrocuted as a result of your business negligence). Without proper coverage, you could be held both personally and commercially liable for any or all damage caused by your business.

Most small electrical and handyman businesses as well as self-employed electricians do not need more than a simple electrician liability insurance plan. As we talked about above and will discuss further below, a general liability insurance policy is designed to protect you and your business in the event that a client or a third-party individual makes claims against you. Depending on the amount of coverage outlined in your policy, your insurance provider will pay out claims resulting from injuries or property damage.

Electrical Contractor's Insurance

If you own a larger commercial contracting business and employ several other electricians, then you’ll need to get your hands "dirty" and find an electrical contractors insurance company, since as a larger company, there’s a higher degree of risk that your business is taking on.

On any given day, you could have multiple employees completing a number of different electrical jobs around town. All it takes is for one of them to make a mistake, and your whole company could be held liable.

Electrical contractors insurance covers your business by providing a safety net between your company and your clients. If a third-party individual gets hurt or a client’s property is damaged, your electrical contractor liability insurance coverage can cover the costs of medical bills and repairs. Conversely, if one of your employees is hurt on the job, your worker’s comp coverage can pay for their medical bills and compensate them for their time lost at work.

These are just a few examples of what could go wrong. In a perfect world, there would be no mistakes. However, we live in an imperfect world, meaning that it’s your responsibility as a business owner to make sure that you’re prepared for the worst.

What Determines Electrical Contractor Insurance Cost?

How much you’ll pay for your electrical contractor insurance depends heavily on the amount of coverage you need, how many employees you have, the type of jobs you do (and the risk associated with them), and if you have any business assets that need to be insured. The more employees and assets that need to be covered, the higher your insurance premiums will be.

Another key factor in your overall electrical contractor insurance cost is if you’ve made previous insurance claims. If your contracting company has a good record and no major claims have been made over the past few years, then your rates will almost certainly be cheaper than if you recently made claims for an accident. This is why it always pays to follow safety regulations!

Electrical Contractor Liability Insurance

The most common and basic insurance type to have for electrical contractors is electrical contractor liability insurance policy. It is essentially general liability insurance for electrical contractors. This policy is designed to protect you and your company from being “liable” for damages that are incurred while on the job. For example, if a light fixture falls on a client’s head and shatters, then your insurance company will pay for the client’s medical bills and repair the property damage by replacing their light fixture.

Typically, contractors purchase liability coverage in increments of $1 million dollar. This means that you’re covered for up to a one million dollar worth of property and personal damage. As a result, smaller contractors may only need a minimum $1-2 million policy, while larger contractors may want to consider purchasing up to $10 million worth of coverage.

Electrical Contractor Liability Insurance Cost

So, just how much does electrical contractor liability insurance cost? The average general liability insurance policy for electrical contractors and contracting businesses cost $50 a month or $600 a year. 

Electrical Contractor Insurance Cost

Below, you’ll find a table outlining some of the average rates offered by the leading insurance companies on the market for larger electrical contracting businesses. These include sufficient coverage and include all of the vital coverages, including workers compensation insurance for electrical contracting businesses that employ multiple employees. Keep in mind that these are just average rates obtained by surveying business owners across the country. Your own rates may differ considerably, depending on the factors discussed above and on our business insurance main page.

Self-Employed Electrician Insurance

Perhaps you just work for yourself and do small freelance jobs around your neighbourhood. If so, you’re probably thinking, “Do I really need self-employed electrician insurance?”

Even the safest, most skilled self-employed electricians should at least have a general liability insurance policy for electiricians. Electricity, by nature, can be unpredictable. No matter how safe you think you’re being, you can never fully account for what could go wrong.

Journeyman Electrician Insurance

Once you’ve gained the experience, skills and training required to work independently without supervision, yet before becoming a licensed master electrician, you’ll officially be a journeyman electrician. Once you’re a journeyman, then you’ll be able to work on any electrical system without direct supervision from a master.

As a journeyman, you’ll also be able to start your own LLC or sole proprietorship and start working for yourself as a self employed journeyman electrician. Before you go off and start completing jobs on your own, though, it’s critical to purchase journeyman electrician insurance to protect your fledgling business!

Journeyman electrician insurance will cover you from any mishaps involving running your own business.

Journeyman electrician insurance cost should be between $30 to $50 per month, or $360 to $600 annually.

Electrician Insurance Cost

On electrical contractors liability insurance cost section, we discussed insurance policies for larger electrical contractors. What if you’re just a small electrical business or a self-employed electrician, though? In this case, you likely won’t need the same amount of coverage. For example, if you don’t have employees, then you wouldn’t need to pay extra for a comprehensive worker’s comp coverage plan.

How Much is Electrician Insurance?

Now that you know a little bit more about how electrician liability insurance works, you’re probably wondering how the pricing differs from the electrical contractors’ insurance discussed earlier. Since there isn’t as much risk involved on your end and you do not need to cover much, you’ll find that rates are more affordable. Here’s a table outlining some of the most popular electrician insurance providers and the average premium prices to expect.