Solar Contractor Insurance

State laws and local regulations typically require solar panel installers to have a license and permit. To obtain them, you may need to be bonded and insured.

Here are several examples of what you might need:

• Business license. To form a business, you'll need to get a business license and register with your local government.
• Contractor's license. In most states, you'll need a general contractor's license, electrician's license, or solar contractor's license for installation and wiring of solar systems and grid connections. You may need to be a certain age, pass an exam, pay a fee, and show proof of liability coverage or a bond.
• Local permits. Your city, county, or other municipality might require one or more permits for a solar project, such as a building permit, electrical permit, fire safety permit, or dedicated solar permit.
• OSHA compliance. Solar contractors must comply with safety standards for construction and electrical work set by the Occupational Safety and Health Administration (OSHA).

Even when it's not required, a license or certification can help your solar business get contracts and win bids. The most well-known source of certifications for solar professionals is the North American Board of Certified Energy Practitioners (NABCEP), which offers a wide range of options.

Electrical contractor insurance doesn't necessarily cover the specialized risks of solar installation. Here's how they might differ:

• Your state might have different insurance requirements for electricians and solar contractors.
• Solar contractors may find their policies exclude accidents that happen on rooftops. You may need an endorsement to cover any roofing work.
• You may need additional coverage for high-value equipment such as solar panels, batteries, and power inverters.

An insurance agent can help make sure your policies provide the coverage you need to comply with laws, fulfill contracts, and protect against financial losses from accidents and lawsuits.

The cost of solar contractor insurance 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 solar 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.
• Safety measures and experience. A solar 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 or 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.

Solar contractors often rely on other types of installation insurance as part of a comprehensive risk management strategy:

• 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.
• Equipment breakdown insurance helps your business recover if critical equipment breaks down unexpectedly, such as a lift or hoist used to raise panels.
• 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.
• Installation floater insurance is a type of inland marine insurance that covers materials awaiting installation at a jobsite, including solar panels and batteries.
• 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.
• Commercial umbrella insurance, similar to excess liability insurance, activates to provide coverage when your underlying general liability insurance, commercial auto insurance, or employer's liability insurance policy reaches the limit on a claim.
• Builder's risk insurance covers a structure under construction in the event of fire, theft, or vandalism. It also covers the materials at a construction site.
• Environmental insurance, also called pollution liability insurance, pays for cleanup costs and legal fees if your business is sued for heavy metal contamination caused by defective or decommissioned solar panels.

Our licensed agents can help you find the right insurance coverage for your solar energy business, including bonds and specialty coverages.