Insurance for Electrical Contractors

Most electrical contractors install, service, maintain and repair electrical wiring and conduits both inside and outside of buildings. The wiring may comprise of both overhead power lines and underground cables. Inside contractors install electrical wiring used for powering machinery, equipment and lighting systems. Outside contractors install overhead power lines and underground electrical cables. Most states require electrical contractors to be licensed.

Electrical contractors have a lot of affordable options for business liability insurance because they are considered skilled tradesman, and the overall profitability for most insurance companies has been strong.

Recommended Insurance Programs for Electricians

Minimum recommended coverage:

• General Liability
• Property Insurance
• Commercial Auto
• Inland Marine (Tools & Equipment)
• Workers Compensation

Other coverages to consider for Electricians:
Employee Dishonesty, Contractors’ Equipment, Goods in Transit, Installation Floater, Employee Benefits Liability, Umbrella Liability, Hired and Non-owned Auto, Business Income with Extra Expense, Employment-Related Practices, Environmental Impairment Liability and Stop Gap Liability.

Common Risks and Needs Associated with Electrical Contractors

Contractors Liability Insurance (GL)
Premises liability exposures at the contractor’s office are generally limited due to lack of public access to the premises. Outdoor storage of materials may create vandalism and attractive nuisance hazards.

Electrical voltage is always a risk for electricians due to the risk of electrical burns or electrocution to employees or others entering the area. The contractor’s employees can cause damage to clients’ other property or bodily injury to members of the household, the public or employees of other contractors. Tools, power cords and scrap all pose trip hazards even when not in use. If there is work at heights, falling tools or supplies may cause damage and injury if dropped from ladders and scaffolding.

During construction, other contractors typically depend on electricity for lighting and power to perform their work. In existing structures, the contractor must take care to control the electrical flow as new lines are installed alongside existing ones as power fluctuations may damage sensitive equipment. Exterior electrical contractors should always notify other utilities to prevent down time to their customers and must prevent surges to their own customers. Contractors laying underground cables should verify the absence of other utility lines prior to digging to avoid cutting into gas, water or communications cables. Underground laying of cables involves trenching which requires physical barriers to prevent others from falling into open areas.

Completed operations liability exposures can be severe due to improper wiring or grounding. Both power failures and power surges resulting from the contractor’s negligence may result in significant bodily injury or property damage. Work for medical facilities, large manufacturers and the installation of alarm systems can also present the potential for catastrophic loss. For all these exposures, it is important to review any warranties or guarantees you offer as an electrical contractor. Maintenance agreements, in which a contractor promises to keep a system in operation, should also be reviewed.

Property Insurance
Property exposures at the contractor’s premises are generally limited to those of an office and storage for supplies, tools and vehicles. Electrical wiring is not combustible but the insulating sheathing produces a black oily smoke when burnt and can be difficult to extinguish once started. Proper storage with good aisle space is important for preventing fires.

Inland Marine Coverage
Inland marine exposures include owned or rented tools and equipment, building materials (builders’ risk or installation exposure) and materials being transported to and from the job site. Equipment consists mainly of hand tools and ladders unless there is line construction or machinery installation. Line construction may involve the use of cherry pickers and similar equipment for overhead lines, or trenchers and other digging equipment for laying underground cable. Transportation of the material poses minimal hazards to the material itself. Copper cable and wiring have high resale value and can be target theft items. Other hazards to tools and equipment and to materials awaiting installation include vandalism and fire.

Commercial Auto
Automobile liability exposure is generally limited to transporting workers, equipment and electrical cables and supplies to and from job sites. Hazards depend on the type and use of vehicles, and radius of operation with the main hazards being upsets. Vehicles may have special modifications or built-in equipment such as lifts and hoists. Large cables may be awkward and require special handling and tie-down procedures. Age, training, experience and driving records, as well as the age, condition and maintenance of the vehicles, are all important items to consider.

Workers compensation
Workers compensation exposures vary based on the size and nature of the job. Work with hand tools is common to all types of electrical work. Electrical burns are common; electrocution can occur from the use of high-voltage lines. Lifting injuries such as hernias, strains and sprains plus back injuries may also occur. There is also potential injury from the carelessness of employees of other contractors. Minor injuries may be frequent even when the severity exposure is controlled.

Failure to enforce basic safety procedures, such as power shut-off prior to commencing certain operations, may indicate a morale hazard. Employee selection, training and supervision affect the loss potential. When work is done on ladders and scaffolds, there is a potential for injury from falling, being struck by falling objects or adverse weather conditions. Laying underground cable may be near power and gas lines; trench collapse is a potential catastrophic hazard.

Liability Quotes for Electrical Contractors

General Liability Shop.com offers affordable liability insurance quotes for Electricians throughout the U.S. Our Electrical Contractor programs include all lines of business insurance, as well as our Target programs for business owners policies (BOPs). Contact one of our business insurance Specialists today at 800-900-8657, or start a quote online now.

Electrical Contractors Liability Classification Codes

Commercial insurance companies use various liability classification systems in order to classify and rate coverage premiums for Electricians. Here are the most common business insurance classifications for Electrical Contractors:

Business Liability Category: Artisan Contractors

SIC Business Insurance Codes:

• 1731: Electrical Work
• 1623: Communication and Power Line Construction
• 7629: Electrical Repair Shops

NAICS Liability Classifications:

• 238210: Electrical Contractors and Wiring
• 237130: Power and Communication Lines Construction
• 811211: Electronic Repair Shop
• 811219: Other Electronic Precision Equipment Repair

Business ISO General Liability:

• 92478: Electrical Work Inside Buildings
• 92451: Electrical Apparatus—Install, Service and Repair
• 92446: Electrical Light or Power Line Construction

Common Workers Compensation Class Codes:

• 5190: Electrical Wiring Within Buildings
• 3724: Machinery and Equipment Installation and Repair
• 7538: Power Line Construction