HVAC Contractor Insurance: Everything You Need to Know

The right series of insurance policies can keep your HVAC business protected from almost any imaginable disaster.

Run an HVAC business, and you run certain risks. Transporting equipment, working in clients’ homes, managing employees—you must regularly contend with risk factors that open you up to lawsuits or claims. 

While you hope nothing bad will ever happen, thefts, lawsuits, and injuries can wipe out your livelihood in one fell swoop. How do you keep your business alive after such a devastating setback? 

When bad things happen, insurance kicks in to protect your business. 

But what insurance do you really need as an HVAC contractor? Only you can answer that, but the right mix of insurance policies will help you sleep better at night. For complete coverage, you’ll need a mix of both small business owner insurance as well as HVAC-specific policies. 

If you’re worried about:

• Damage to your tools
• Theft
• Car accidents
• Worker injuries
• Lawsuits
• Vandalism
• Damage to clients’ homes

…there’s a policy for that. Don’t let a lawsuit shutter your doors for good. Check out these 10 insurance policy options to keep your business online when the unexpected happens.

10 Types of Insurance for HVAC Contractors

1. General Liability

Average Price: $40/month

Most business owners have some form of liability insurance. General liability insurance protects you from accidental injuries and any damage to your property. 

2. Worker’s Compensation

Average Price: $2,000 annually

If you have employees, your state probably requires Worker’s Compensation insurance. This policy covers an employee’s payroll and medical costs if they get injured on the job. 

3. Car Insurance

Average Price: $140/month

Got a commercial vehicle? Protect yourself from uninsured drivers or accidents with commercial policies. If someone rear-ends you on the way to a job, you don’t want to be out an expensive truck or van. 

4. Business Owner’s Policy (BOP)

Average Price: $99/month

BOPs often roll multiple policies into one, giving you the convenience of a single policy for multiple liabilities. BOPs often include:

• Business interruption insurance. COVID-19 is a great example of how interruption insurance can keep you afloat during uncertain times. 
• General liability insurance. This is often rolled into BOPs as a standard. 
• Property damage. If you have an office or storefront, the BOP protects your investment. 

BOPs usually cover your basic insurance needs. As an HVAC provider, you can often get by with BOP and add complementary policies, depending on your needs. 

5. Surety Bond

Average Price: 1-15% of the bond amount

Some states require you to offer a surety bond that backs up any work performed for your clients. If an employee mucks up a job that requires an expensive amount of rework, your surety bond will cover the cost. This is not only a great way to CYA, but it also boosts customer trust. 

6. Business Equipment Insurance

Average Price: Starts at $500 annually

HVAC operations require pricey equipment. If you’re worried about theft or damage to your more expensive equipment, insure it. As a rule of thumb, if you don’t have the cash on hand for replacing a piece of equipment, you should insure it. 

7. Professional Liability Insurance

Average Price: $59/month

Professional liability insurance protects you from lawsuits as a business. It’s specifically designed to protect your interests in an expensive lawsuit. Professional liability insurance will cover your attorney fees and any judgments against you if you lose a lawsuit. If you stay up at night worrying that a customer will sue you, this policy should give you some peace. 

8. Inland Marine Coverage

Average Price: $2,500 annually

Inland marine coverage is a specialty insurance policy that’s perfect for HVAC contractors. This policy protects any company property while it’s in transit. Whether you’re shipping an AC unit across the country or someone swipes equipment from the van, inland marine should cover the replacement costs. 

9. Employee Dishonesty Insurance

Average Price: $300 annually

Like it or not, employee theft happens. If an employee steals money from the register, pilfers from your toolbox, or commits the ultimate sin of stealing from a client’s home, this insurance policy covers the cost of the theft. 

10. Umbrella Insurance

Average Price: $300 annually

Umbrella policies are an extension of your professional liability policy. After all, what happens if you have professional liability insurance, but it won’t cover all of your legal fees? Umbrella insurance bridges that gap, making up the difference and paying for legal fees or judgments against you. 

Final Thoughts

You can’t predict unforeseen circumstances in your business, but you can prepare for them. The right mix of HVAC insurance policies will keep your operation going for years to come. 

Start with the legally-required policies and see what’s missing. If you don’t have enough cash to cover lawsuits, thefts, or injuries, additional policies aren’t a bad idea. 

HVAC insurance protects your business, maintains customer trust, and ensures your business lives to fight another day. Speak with your accountant or insurance agent to see which HVAC insurance policies will best protect your financial interests.