How Insurance Protects HVAC Contractors

How Insurance Protects HVAC Contractors

February 8, 2023 / 5 mins read

You’re in high demand when a furnace or air conditioner breaks down.

Your make sure that heating, ventilation, and air conditioning (HVAC) systems work properly, providing cool or warm temperatures with clean air. It’s important to have the right HVAC insurance package to protect your business.

Your Western business insurance expert will give you top-notch advice and ways to save on your HVAC insurance package.

What kind of HVAC insurance package do I need?

As a Prince George HVAC contractor, you work in homes, offices, and businesses. That means your job is not without risk.

Your HVAC insurance package can provide coverage for risks such as an equipment breakdown, theft, property damage, a fire, getting sued, or somebody getting hurt because of your work.

A fleet insurance package can help protect you from these 3 common claims:

  1. A fire starts while you are fixing a client’s air conditioner unit and causes damage.
  2. After fixing a client’s furnace, toxic chemicals are emitted into the client’s basement.
  3. Your van for your HVAC is broken into and tools are stolen.

Here’s your HVAC contractor insurance check list:

  • Do you have the best business insurance rate for your business?
  • Do you have the right amount for your deductible and regularly review to make sure it’s the right amount for your business?
  • Is your number of employees up to date?
  • Are your employees properly insured if they drive your vehicles for business?
  • Do you know the value of your tools and equipment

Here are insurance coverages recommended for your Prince George HVAC business:

Commercial General Liability Insurance (CGL): The most important type of insurance your Prince George HVAC business needs is commercial general liability.

If you cause a customer bodily harm, this type of insurance will help pay for the medical expenses related to your customer.

If you damage a piece of property, the policy will help pay the repair costs.

What if your work on a ventilation or air conditioning system causes moisture problems in a client’s home or in a business and you get sued for property damages? CGL insurance can help cover your business’s legal expenses and repair costs associated with the incident.

Your CGL policy also helps protect you from libel, slander, copyright infringement, and false advertising allegations.

Without commercial liability insurance, you would be responsible for paying any liability costs out of your own pocket.

How much CGL insurance do I need as an HVAC contractor?

It depends on the size of your HVAC business. Do you operate a large HVAC company, or you are a small business with several employees? That will help determine the amount of CGL insurance that you need.

If you are an HVAC contractor working inside residential or commercial properties and you are fixing, repairing, and or installing heating and air condition units, then it’s expected that you carry a minimum of $2 million in CGL insurance. A higher liability limit will be expected if you have a large HVAC business.

Ask your Western business insurance expert how much CGL insurance your Prince George HVAC business needs.

Professional Liability Insurance: It’s also known as Errors and Omissions (E&O) insurance. This type of insurance provides financial protection and covers legal fees and judgments if a dissatisfied client sues your HVAC company for the following:

  • Work errors and errors in design
  • Incomplete work or failure to fulfill the job contract
  • Misrepresentation of services or skills
  • Violation of good faith and fair dealing
  • Inaccurate advice given to customers
  • Alleged or actual negligence

Professional liability insurance limits coverage to owners and employees and they do not cover work done by subcontractors. It also does not cover non-financial losses or losses caused by intentional or dishonest acts.

It pays for any damages related to your work or the job site after your HVAC company finishes the work and which results from your negligence, errors, or omissions. It does not cover work that’s in progress or damages already covered under your general liability policy.

Tools and Equipment Insurance: This type of insurance is also known as HVAC equipment insurance, and it protects your business’s tools and equipment. If your tools or equipment are stolen, lost, or damaged, this policy may cover the repair or replacement costs. Anything valued at less than $1,500 is considered a tool and anything above that limit is considered equipment.

Make a list of your tools and equipment and show it to your Western business insurance expert.

Commercial Property Insurance: Where are your HVAC business operations located? This type of insurance can help keep you protected from property losses, such as theft or vandalism. You can also add earthquake insurance, sewer backup or flood coverage extensions.

You’ll need to do an inventory of all your business property to determine how much commercial property insurance you will need.

Commercial property insurance protects your HVAC business office and its contents.

Property you may need to insure:

  • Buildings and other structures
  • Furniture, equipment, supplies
  • Inventory, computers
  • Documents such as payroll, accounts receivable

Business Interruption Insurance: This coverage supports you when your HVAC business can’t operate due to a covered loss.

There are a number of losses that can force your HVAC business to shut down. Some examples include:

  • Damage to your equipment from fire or vandalism
  • A major reduction in revenue due to a client/supplier facing losses of their own
  • A disruption in your supply chain

Business interruption insurance can help with expenses such as:

  • Payroll
  • Rent
  • Utilities
  • Property taxes
  • Alarm monitoring
  • Relocation of your business

This type of insurance can be the difference between recovering from a loss and closing permanently.

Pollution Liability Insurance: It is a specialized type of coverage that will protect you against pollution-related accidents that cause third-party injury or property damage. If your HVAC work causes a pollution hazard, your business will have protection.

Commercial Auto Insurance: If you have a business van(s) or business car(s) that you use for your business, you will need commercial coverage as part of your HVAC business insurance package. These vehicles are not covered by your personal car insurance policy.

If you have a large HVAC operation, you will need fleet insurance if you own five or more vehicles and use them exclusively for business purposes.

Surety bond: Once you accept a job from a client, you are obligated to complete it. A surety bond is a type of business insurance that will pay your client if you fail to complete a job.

If you go out of business, go bankrupt, or otherwise fail to finish the job, your customer can file a claim to get financial compensation with your insurer to have their costs covered, up to a maximum amount.

You may be required to have a surety bond before accepting a contract. Only companies licensed by the Surety Association of Canada may offer you a surety bond.

Ask your Western business insurance expert to go over the details of a surety bond with you and how it can protect your HVAC business.

What do I do if my HVAC business has an insurance claim?

  • Contact your broker immediately. Waiting to file a claim can confuse insurers about the severity of the damages to your business.
  • Know your policy so that when you contact your broker you are familiar with what will be covered or not.
  • Document the damage. Take photos right away and write down what happened.
  • Do not throw away damaged goods after taking photos. Keep the physical evidence so that your adjustor can see it.
  • Do not invite lawsuits. Don’t say anything that could be used against you, especially if you aren’t sure what happened.
  • Be honest about what your damaged property is actually worth. Damaged commercial property is generally valued according to its actual cash value or replacement value.

Western Insurance has licensed BUSINESS INSURANCE EXPERTS to get your Prince George HVAC business the right insurance package. Our experts are available now to help you navigate the business insurance journey to protect your HVAC business.

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