Fire Sprinkler Contractor Insurance

Yes, you will probably need fire sprinkler contractor insurance to comply with laws and the terms of contracts. Here are several situations that require insurance:

• You need a contractor's license. State licensing requirements for contractors often mandate general liability insurance and workers' compensation insurance. For example, every licensed contractor in California must have both forms of coverage.
• You need coverage for employees. Most states require workers' compensation insurance for businesses with employees, sometimes even for sole proprietors in high-risk industries like construction.
• Your business owns a vehicle. Similarly, almost every state requires commercial auto insurance for vehicles owned by a business.
• Your landlord requires it. You'll typically need to show proof of liability insurance to sign a lease for an office or other commercial space.
• Your clients request it. Clients and partners may require you to be insured, so they know they'll be protected in the event of a lawsuit.

Some cities and municipalities have their own requirements for fire protection contractors, which may include insurance. Even when it's not required, it's important to carry liability insurance to protect against unexpected financial losses from accidents and lawsuits.

A fire suppression system that goes off by mistake—or fails to activate in an emergency—could lead to serious damage or even risk lives. That's why sprinkler fitters should always carry professional liability insurance, also called errors and omissions insurance (E&O).

General liability insurance covers accidental harm, but if a client sues over faulty workmanship, it won't provide coverage.

Here's an overview of the protection offered by these policies:

• General liability insurance covers accidents that injure someone or damage their property.
• Professional liability insurance covers negligent acts that damage property or cause financial harm, such as design flaws, work that isn't up to code, or other cases of professional negligence.

Both types of contractor liability insurance will cover your financial losses in the event of a lawsuit, such as attorney’s fees, court costs, and a settlement or judgment. However, they cover different situations, which is why you need both policies.

The cost of fire sprinkler insurance for contractors depends on your unique risks and the policies you buy.

Factors that affect your premiums include:

• Business size and revenue. Bigger businesses that earn more tend to pay more for insurance, as they're associated with costlier claims.
• Type of sprinkler projects. Insurance rates are higher for large-scale commercial installations than smaller residential installations.
• Number of employees. A larger workforce brings an increased risk of injuries, accidents, and lawsuits, which results in higher premiums for policies like general liability and workers' comp.
• Business location. Businesses in areas that are susceptible to flooding or property crime can expect higher insurance rates. Higher property values or healthcare costs can also drive up the cost of insurance.
• Years of experience. A fire suppression contractor who has been in business for a long time with a strong safety record and risk control measures may see lower insurance rates.
• Certifications. Earning the right certifications shows you're well-versed in safety, which could lead to lower premiums.
• Claims history. Companies with a clean history of claims often pay less for insurance coverage, which is another reason to focus on risk management.
• Types of insurance. Some insurance policies, such as general liability insurance, are inexpensive compared to others.
• Coverage limits and deductibles. You can save money on insurance by choosing lower per-occurrence and aggregate limits or a higher deductible. However, make sure you can easily afford the deductible and that your limits are sufficient to cover a potential claim.

Beyond any insurance required by laws and contracts, you'll want to make sure your business property has sufficient coverage and you're prepared for lawsuits and accidents.

Fire sprinkler contractors often rely on other types of installation insurance for comprehensive protection against a range of risks:

• Commercial property insurance covers your office and its contents, including computers, furniture, and equipment stored at your business address. If you don't have an office, you can buy business personal property (BPP) coverage to protect the items that belong to your business instead.
• Inland marine insurance protects business property that travels to jobsites, including power drills and other equipment. It also covers items in transit and stored off-site.
• Equipment breakdown insurance helps your business recover if a critical piece of machinery breaks down unexpectedly, such as a pipe threading machine.
• Business interruption insurance covers loss of income and operating expenses if your business is forced to close temporarily due to a fire or other covered property claim. It's also called business income coverage.
• Products-completed operations coverage, also called product liability insurance, covers damage caused by defective products and your completed service, such as a faulty part that leaks and causes water damage.
• Commercial umbrella insurance, similar to excess liability insurance, provides coverage when your underlying general liability, commercial auto, or employer's liability insurance policy reaches the limit on a claim.
• Owners and contractors protective (OCP) liability insurance protects the project owner or general contractor from costs related to incidents caused by a fire sprinkler contractor. It protects the named insured who hired you, but it's not a replacement for your own liability coverage.
• Contractors pollution liability insurance covers legal fees and cleanup costs if fire suppression agents or other contaminants leak from a fire sprinkler system installed by your business.
• Management liability insurance pays for legal costs if a manager at your company is sued for discrimination, fraud, or a decision that leads to financial loss.
• Surety bonds provide financial compensation to clients and other parties if your company fails to fulfill the terms of a contract or adhere to regulations.

Our licensed agents can help you find the right insurance program for your fire suppression business, including bonds and specialized insurance coverages.