Insurance for HVAC Contractors

Heating and Air Conditioning Contractors service and repair heating and HVAC units within a commercial building or a residence, including related duct and vent work. The fuel sources for heating equipment can be natural or LP gas, electric, steam, solid fuel, coal or fuel oil. Contractors may also sell the units they install.

Many contractors also install, service and repair air conditioners. While air conditioning units are normally electric-powered, they are charged with different coolants, some of which may be hazardous.

Recommended Insurance Programs for Heating and Air Contractors

Minimum recommended coverage:

• General Liability
• Property Insurance
• Hired and Non-Owned Auto (full commercial auto if vehicles owned)
• Inland Marine
• Business Income with Extra Expense
• Workers Compensation

Other coverages to consider for HVAC:
Business Personal Property, Employee Dishonesty, Contractors’ Equipment, Goods in Transit, Installation Floater, Employee Benefits Liability, Umbrella Liability, Automobile Liability and Physical Damage, Business Income with Extra Expense, Accounts Receivable, Computers, Valuable Papers and Records, Employment Practices Liability, Environmental Impairment Liability and Stop Gap Liability.

Common Risks and Needs Associated with Heating and Air Contractors

General Liability Insurance
GL exposures at the contractor’s office or shop are generally limited due to lack of public access to the premises. Retail sales increase the possibility of customers slipping, falling or tripping if customers visit office to view products.

During installation, electrical voltage must be turned off at the job site in order to reduce the risk of electrical burns or electrocution to others entering the area, and turned back on after work stops, all while minimizing any disruption of electrical service to other homes or businesses in the vicinity. Welding presents potential for burns or fire if not conducted safely. The contractor’s employees can cause damage to the client’s property or bodily injury to members of the household, the public or employees of other contractors.

Tools, power cords and scrap materials 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, scaffolding, cranes or helicopters. Pressure-testing of boilers and other pressure vessels can result in explosions or fire.

Completed operations GL exposures can be severe due to improper wiring or grounding of equipment. When a heating unit malfunctions, the cause may be difficult to determine. Specialists may have to be hired to determine whether it arose from improper operation and maintenance, faulty system design, faulty manufacture or faulty installation. Quality controls, including work order documentation, and employee training, background and experience are important.

Boiler work, LP gas units and wood burning units have high products liability exposures. Improperly installed heating units pose potential injury to tenants and their customers within buildings due to exposure to carbon monoxide and other fumes or gases.

Property Insurance
Property exposures at the heating contractor’s own location are generally limited to those of an office, shop and the storage of materials, equipment and vehicles. Operations may also include retail sales. The fire exposure is generally light unless repair operations involving welding take place on premises. Welding involves the use of gas tanks that must be stored and handled properly to avoid loss. The absence of basic controls such as chained storage in a cool area and the separation of welding from other operations may reflect a greater risk.

Commercial Auto
Automobile exposures are generally limited to transporting workers, equipment 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 heating systems 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 factors to consider. If employees utilize their own personal vehicles for work-related tasks then Hired and Non-Owned Coverage should be purchased.

Inland Marine Coverage
Inland marine exposures include contractors’ tools and equipment, such as ladders and scaffolding, hoists and portable welders, the transport of materials, and installation floater. Goods in transit consists of tools and equipment as well as products purchased by the customer for installation at the job site. HVAC units can be of high value and susceptible to damage in transit; they frequently require expertise in loading to prevent load shift or overturn.

The installation floater exposure exists when the units to be installed are delivered to the site in advance of the installation. Machinery, tools or building materials left at job sites are exposed to loss by theft, vandalism, damage from wind and weather as well as damage by employees of other contractors. Contractors may rent, lease or borrow equipment from others or rent, lease or loan their owned equipment to others, which poses additional risk as the operator may be unfamiliar with operation of the borrowed item. If large or suspended heating units are lifted by cranes to roof tops for installation or dropped into place by helicopters, the units could be damaged from drops and falls. Since an accident may trigger both the equipment and installation coverages, as well as possible third-party liability, many contractors prefer to hire a crane or helicopter with a licensed operator.

Workers Compensation
Workers compensation exposures vary based on the size and nature of the job. Both residential and commercial work involves lifting, work with hand tools, wiring and piping. Cuts from the fabrication and installation of sheet metal for ducts and vents are common. Lifting injuries such as hernias, strains and sprains plus back injuries may occur. Electrical burns are common; electrocution can occur from the use of high-voltage lines. Any time work is done above ground, injury or death from falls and being struck by falling objects can occur. Slips and falls, foreign object in eyes, major and minor burns and inhalation of fumes are all potential hazards.

Complications from the large, heavy machinery and their use, misuse, maintenance and transport have unique hazards. Welding may be done in confined spaces; proper ventilation and fire protection are essential to prevent injury to workers. In repair and installation operations, workers may come in contact with old insulation to be removed, some of which may include “friable” (easily crumbled) asbestos. Procedures must be in place to identify and handle this exposure.

General Liability Quotes for HVAC Contractors

General Liability Shop.com offers affordable liability insurance quotes for Heating and Air Contractors throughout the U.S. Our HVAC 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.

HVAC Insurance Liability Classification Codes

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

Business Liability Category: Contractors—Construction

SIC Business Insurance Codes:

• 1711: Plumbing, Heating and Air Conditioning
• 7699: Equipment Installation and Shops

NAICS Liability Classifications:

• 238220: Plumbing, Heating and Air Conditioning Contractors

Business ISO General Liability:

• 95647: Heating and A/C Systems—Dealers, Installers, Service and Repair—NO LPG
• 95648: Heating and Air Conditioning Systems—Dealers, Installers, Service and Repair
• 91250: Boiler Inspection, Installation, Cleaning and Repair

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