If you’re opening a business in which you repair or replace heating and cooling systems, you’ll need HVAC contractor liability insurance. While finding out about extra business expenses is never fun, this one is a requirement that you’ll be glad to have if you or your employees ever make an expensive mistake at work. Fortunately, there are some ways to save money on business insurance so you get the protection you need without spending too much.
Here’s how to reduce your insurance costs in the HVAC industry:
Know the coverage you need
First, you’ll need to know which coverage is required so you can begin operating without breaking any rules in this field. The most basic business insurance for HVAC contractors is general liability, which covers a variety of situations that could be costly without insurance.
The coverage you’ll get with general liability includes the following:
- Property damage. If you accidentally damage a customer’s property while fixing or replacing an HVAC system, you’ll be glad to have property damage as part of your HVAC contractor liability insurance. This coverage pays to fix any damage you or your employees cause to your customer’s property.
- Bodily injury. If your customer gets injured while you’re working on their HVAC system, the bodily injury portion of your small business insurance will kick in and cover medical bills. For instance, if a customer trips over your toolbox and breaks an arm, your insurance will pay for the hospital bills and any follow-up doctor appointments. This way, you won’t have to pay those bills out of pocket.
- Products and completed operations. Another part of general liability insurance applies to any services you’ve already performed, assuming there’s ever an issue that comes up after the customer has paid. For example, if you install an air conditioner, and a fire in the home is traced back to it months later, general liability will pay for the damages.
- Personal and advertising injury. Your business might be accused of committing slander or libel against another company when you advertise. If this happens, you’ll be happy to have this coverage, which will pay your legal defence costs if you’re sued.
- Damage to any premises rented to you. Finally, if you rent a space for your business, such as an office or warehouse for your equipment, your general liability insurance will pay for any damage done to it. So if you drop a heavy tool and damage the floor, or accidentally cause a fire in the building, general liability will pay for the repairs.
This is the coverage you get when you have the minimal amount of business insurance in the HVAC field. So if you’re trying to save money, you can stick to this coverage. But if you want more protection in the long run, you can add more coverage, such as tools and equipment, commercial auto, workers’ comp, and more. In fact, depending on where you live and how many employees you have, these additional coverage options might be required, so be sure to check with your local laws as you set up your business.
Look for bundle discounts
Once you choose the coverage you need for your business, you can start looking for ways to save money on insurance. One of the simplest ways is to bundle your coverage by choosing a package policy.
For instance, you may be able to get a business owner’s policy, otherwise known as a BOP. This bundles several coverage options that the average business owner might want, giving you protection against property damage, liability, business interruption, peril, and more. Typically, the cost of a BOP is much lower than what you would pay for individual coverage options.
Choose a higher deductible
Another way to save money on HVAC contractor liability insurance is to increase your deductible. This is the amount you will have to pay upfront on any claim you make with your insurance company. As long as you’re willing to pay a little more on each claim, you can reduce your monthly or annual premium cost.
For example, if the default deductible for business insurance is $500, increasing it to $1,000 or more can bring your regular payments down. Just be sure you have the extra money on hand for the deductible in case you need to make a claim for your business.
Finally, make sure you shop around before you buy business insurance. There are lots of companies that want you as a customer, and you should carefully decide which one is likely to give you the most protection for the best rates.
Try to collect rates from at least five companies before you make your decision. Fortunately, getting rates to compare is easy and takes only minutes, since you can do this online or over the phone.
On average, annual premiums on general liability for HVAC contractors are around $870, with a range of about $400 to $1,500 per year. If you’d like to reduce this price as much as possible, you can try sticking to basic coverage, bundling coverage options, increasing the deductible, and getting rate estimates from several companies before making your decision. Anything you save on this business expense is money you can put toward other aspects of your business, so making an effort to reduce these costs is a good idea.
Alicia Saville did her degree in psychology at the University of Edinburgh. She is interested in mental health and well-being.