Electrician Insurance

It’s easy to get insurance coverage and surety bonds as an electrical contractor or company if you have your business information on hand. Our insurance application will ask for basic facts about your small business, such as revenue and number of employees. You can buy a policy online and get a certificate of insurance with Insureon in three easy steps:

1. Complete a free online application.
2. Compare insurance quotes and choose policies.
3. Pay for your policy and download a certificate.

Insureon's licensed insurance agents work with top-rated U.S. insurance companies to find the most affordable coverage that fits electrician businesses, whether you work independently or hire employees.

Most states and municipalities require electricians to be licensed, as well as carry certain types of insurance and bonds. Licensing, permit, and insurance requirements can vary depending on the states where you operate and the services you provide, such as fiber optic installation, lighting systems, electrical controls, or traffic signal work.

Even in states that don’t require electricians to be licensed, you might still need a license at the local level to work as an electrician. In many cases, electricians must complete several years as an apprentice under a master electrician before becoming eligible for a licensing exam.

Beyond legal requirements, having the proper license, insurance, and permits can help new electrical businesses build credibility and attract clients. Many commercial clients, general contractors, and project owners also require proof of insurance and licensing before work can begin. 

Some insurance and bonds are often required by your state and local regulations, like workers' compensation, commercial auto, or various types of surety bonds.

Electrical contractor businesses may be required to carry certain types of insurance and bonds depending on their state, license classification, contracts, and number of employees. Requirements can also vary based on whether the business performs residential, commercial, industrial, or specialty electrical work.

General liability insurance is commonly required for electrical contractor licensing and project contracts because it helps cover customer injuries, property damage, and legal expenses. Some states and municipalities may also require surety bonds as part of the licensing process.

Businesses with employees are often required by state law to carry workers' compensation insurance, especially in the construction trades where workplace injuries are more common. Companies with work vans, trucks, or other business-owned vehicles typically must carry commercial auto insurance to meet state minimum liability requirements.

Many project owners, general contractors, and commercial clients also require proof of insurance before work can begin. It's important to review state and local requirements carefully to make sure your electrical business carries the proper coverage and limits.

It depends on the policy, subcontractor relationship, and terms of the contract. In some cases, 1099 contractors and subcontractors can be added to an electrician’s insurance policy as an additional insured. However, many project owners, general contractors, and insurers require subcontractors to carry their own insurance coverage.

Independent electricians and subcontractors are usually expected to have their own general liability insurance, workers' compensation coverage, and commercial auto insurance, depending on the work they perform and state requirements. Requiring subcontractors to maintain their own policies can help reduce coverage disputes and protect your business from liability claims caused by their work.

Before hiring subcontractors, electricians should review contract agreements carefully and confirm insurance requirements, coverage limits, and certificate of insurance obligations.

General liability insurance typically doesn't cover stolen tools, damaged equipment, or losses involving your own business property. While commercial property insurance may help cover equipment stored at your business location, it doesn't usually protect tools while they're in transit or at a jobsite.

That’s why many electricians carry inland marine insurance, also called contractor's tools and equipment insurance. This coverage helps protect tools, testing devices, materials, and other equipment against theft, damage, or loss while traveling between jobsites or being used off-site. Because electricians frequently transport expensive tools and equipment, this policy is often considered one of the most important policies for day-to-day operations.

In many cases, tools and equipment with higher values may need to be specifically scheduled on the policy. For example, individual items worth more than $2,500 may require separate listing and valuation, though limits and requirements can vary by insurer.

Professional liability insurance, also called professional indemnity insurance, protects your electrician business should a client sue you over an error, mistake, or negligence that negatively impacted them.

State laws don’t often require businesses to carry professional liability insurance. However, it's particularly useful for businesses that primarily sell industry expertise and knowledge rather than physical products.

For example, electricians should carry this coverage in the event a client accuses them of improperly wiring their new home and as a result, it doesn't pass inspection. The client could sue them for the cost of having the project redone and the home inspection fees.

Claims protected by professional indemnity insurance include:

• Professional negligence
• Breach of contract
• Oversights and errors
• Breach of confidentiality
• Poor professional advice
• Missed deadlines and undelivered services

No matter how careful you try to be, human error is inevitable, and the out-of-pocket costs associated with legal action can be expensive. Having the best professional liability insurance policy can protect your business in the event of an unsatisfied customer lawsuit.