Workers’ compensation insurance for installation businesses

Whether you specialize in HVAC, drywall, or appliance installation, physical labor can lead to serious injury. Even a simple accident, such as tripping over a loose cable, can result in costly medical bills. Workers’ compensation insurance offers coverage for installation businesses in three areas:

• Work-related injury or illness medical bills
• State law compliance
• Employee injury lawsuits

• Immediate medical costs, such as an ambulance ride and emergency room expenses
• Ongoing medical costs, including medications and physical rehabilitation
• Partial lost wages while the employee is unable to work

Usually included in a workers’ comp policy, employer’s liability insurance provides protection when an employee decides the business owner was at fault for an injury. Employer’s liability insurance can help pay for:

• Attorney’s fees
• Court costs
• Settlements or judgments

Even if a lawsuit is found to be frivolous, you could find yourself paying for a costly legal defense if not adequately insured.

The amount you pay for workers’ compensation is a specific rate based on every $100 of your business’s payroll. Your premium is determined by the type of work done by your employees (classification rate), your experience modification rate (claims history), and your payroll (per $100).

The formula is:
Classification rate  x Experience modification rate  x (Payroll / 100) = Premium

Each state has its own set of laws for workers’ compensation requirements. For example, installation businesses in Pennsylvania are required to carry workers’ comp insurance for all employees, including part-time workers. However, Georgia businesses only need to carry the policy when they regularly employ three or more employees.

While independent contractors, sole proprietors, and partners usually don’t have to carry workers’ compensation insurance, you can purchase a policy to protect yourself, too. It's a good idea to carry this coverage for financial protection against work injuries, which health insurance might not cover.

In certain states, installation businesses must purchase workers’ compensation insurance through a monopolistic state fund. Those states are:

• North Dakota
• Ohio
• Washington
• Wyoming

If you purchase a workers’ comp policy through a monopolistic state fund, it might not include employer’s liability insurance. However, you can purchase it from a private insurer to fill this gap in coverage.

Work injuries that lead to insurance claims can increase your premium. However, any company can mitigate its risks. For example, you could:

• Provide dollies and hand trucks
• Require workers to wear gloves and helmets
• Teach safe lifting techniques

Taking these steps could reduce workplace injuries, along with your insurance premium.

Workers’ compensation insurance protects your employees and to some extent your business, but it doesn’t offer coverage for every risk. Installation business owners should also consider:

General liability insurance: This policy can cover expenses related to customer injuries and property damage, such as an appliance installer sued for damage to a client’s floor.

Commercial auto insurance: This policy covers vehicles owned by your installation business. It pays for accidents, theft, and damage from weather and vandalism.

Contractor’s tools and equipment insurance: This policy helps pay for repair or replacement of an installation contractor’s tools and equipment if they are lost, stolen, or damaged.

Are you ready to safeguard your installation business with workers’ compensation or another type of insurance? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.