Insurance Concerns for Heating and Air Conditioning (HVAC) Companies
Heating and Air Conditioning Companies have HVAC Technicians who install, service, and repair heating, air-conditioning, ventilation, and refrigeration systems. The scope of this type of work for this class code includes any electrical wiring, cleaning, oiling, adjusting, plumbing, or sheet metal work. Insurance can protect your business from common risks that could result bodily injury as well as property damage claims. As any business owner knows, no two businesses are the same. Because of this, you can expect your HVAC insurance costs to vary carrier to carrier and from business to business. The common factors that can influence what a business pays for workers comp coverage is the businesses claims history, documented safety programs, specific coverage needs, and level of exposure for a business within HVAC Workers Comp Class Code 5537.
What to consider when buying Insurance for a Heating and Air Conditioning Business
Both at the beginning of the Summer and Winter Heating and Air Conditioning Companies are extremely busy. The fact that the business is dealing with other people’s emergencies can cause chaos to wreak havoc on your business. If the business is not protected properly by a quality insurance package bodily injury and property damage claims can cause a lot of financial damage to the business.
Air conditioning units are most commonly electric-powered, but they are charged with different coolants, some of which may be hazardous. In addition to the chemicals an HVAC Contractor has to interact with, dealing with electrical hazards also present a risk that must be addressed by all businesses. In addition to electrical and chemical risks, the fact that a majority of all work is done at a third party location raises the risk of many injuries. The fact that employees are driving to third party locations presents a driving hazard. Any time there is a driving hazard involved with a business, insurance carriers are weary of offering coverage. The rate for premium with businesses that have a driving risk are always higher compared to businesses without this risk.
Who needs Heating and Air Conditioning Contractor Insurance?
Insurance for HVAC Contractors can be as unique as the risks faced by each business. Class code 5537 is used for most employees in this industry. This class code includes employees that operate within both residential and commercial work. When it comes to the decision to carry workers compensation insurance or not, most every state requires HVAC employers to have Workers’ Compensation Insurance.
There may be exclusions for some businesses in some states depending upon the size, scope, and structure of the business. It is usually in the best interest of the business to secure some form of coverage against employee injuries. Many contracts will require a business or contractor to provide a certificate of insurance just to enter into a contract.
If the HVAC Contractor is the owner of the business and they are the only employee of that business, a ghost policy may meet the requirements for a certificate of insurance needed to enter into most contracts. A ghost policy is usually offered at a significant lower rate then a traditional workers compensation policy. If the business is a startup or is cash strapped for any reason, most carriers offer alternative payment options like Pay as You Go Workers Compensation that require much less up front to get coverage in place.
Top Workplace Safety Concerns for HVAC Companies
When it comes to protecting yourself and your employees, safety protocols are extremely important. An insurance carrier understands the risks associated with operating in the heating and cooling industry. Because of the significant amount of exposure to bodily injury, it is important to implement a well thought out safety program for your business.
The safety program should start the day an employee is hired and should include all employees. The meetings do not have to be exhaustive, but they should be regular and ongoing. Starting a safety committee that includes employees from all levels of seniority is a good way to get buy-in at all levels. The more frequent and regular the communications are about safety, the more likely they are to be adopted throughout the organization.
Additional Coverages for HVAC Companies and Contractors
- General Liability
- Property Insurance
- Hired and Non-Owned Auto (full commercial auto if vehicles owned)
- Inland Marine
- Business Income with Extra Expense
General Liability Insurance
General Liability Insurance covers a business for common bodily injury and property damages. The exposures associated with a heating and air conditioning company are unique and diverse. A Standard General Liability Policy will cover common slips, trips, and falls; but it is important to remember the policy is not all encompassing. In most cases, there are additional policies a business needs to secure.
Commercial Property Insurance
Most business owners are somewhat familiar with this type of insurance because they more then likely own a home. There are a few differences between a homeowners policy and a commercial property insurance policy. THe first primary difference between teh two policies is that on a commercial policy, any number of parties could be listed depending on the ownership structure of the business or property. A home owners policy is most often a single person or a married couple. For a residential insurance policy, the insured is generally covered against claims for premises liability, but when a business is involved it requires additional coverage for operations, products, and additional liability. A commercial property insurance policy can include loss of income that a homeowners policy does not include. This is important for people who run their business out of their home, because depending upon how the business is structured and the type of coverage you have, there may be a gap in coverage. The final main difference is that residential policies generally cover one property. A commercial policy can be adjusted to involve several properties as long as each property has a similar use.
Commercial Auto Insurance
Commercial Automobile exposures for HVAC Companies are large. This is because of the fact a majority of the work is done at third party locations. The time an employee is driving from work to a remote location and back to the businesses location is consider company time. The business is liable for damages caused in a wreck that is the fault of the employee. This is the case regardless if the employee is driving a company vehicle or their personal automobile. If the employees do frequently use their personal auto, a hired an non owned auto policy should be secured in addition or in place of a commercial auto. Partnering with an independent insurance agent is the best way to determine which policy your business needs.
Inland Marine Insurance
Inland Marine Insurance is the final policy most all HVAC Companies need to secure. Inland marine covers the equipment that is frequently transported away from the businesses property or stored at a third party location. Without this policy any equipment that is damaged not on the property of the business is the responsibility of the business. If your business has expensive equipment that is crucial to the work of your employees, an inland marine insurance policy is necessary to adequately protect your business.
Common Workers Compensation Class Codes:
- 5537: Heating, Ventilation, A/C and Refrigeration Systems—Install, Service and Repair
- 8720: Heating and Air Conditioning—Inspection and Outside Sales
- 3726: Boiler Installation or Repair
- 5183: Plumbing—Gas or Water