Electrician Business Insurance

Electricians can compare business insurance policies from top providers through Insuranceopedia to find the right coverage for general liability, property damage, and employee protection.

Why Do Electricians Need Insurance?

Electricians need insurance to cover the inherent risks associated with their job, including safety hazards, property damage, legal liabilities, and, of course, maintaining client trust.

Electricians work in an area with a high risk of liability, including accidents and injuries to employees as well as contractors, like electrical burns, shocks, or other physical injury associated with carrying proper tools. Without the right insurance, electrician companies can be on the hook for significant losses if there is an accident or other damage, and might be financially responsible for any damages resulting from a lawsuit.

Then you add the risk of liability, like property damage if an accident causes significant damage to customer property, or a customer trips over all of the excess wiring that a contractor leaves on the floor. General liability insurance can protect an electrician against claims of property damage, bodily injury, or even lawsuits.

It also adds credibility—many customers and clients require proof of insurance before hiring an electrician. If you’re an independent contractor or you have a business with several contractors under your employ, having the right insurance helps you operate confidently, knowing you’re covered if something goes wrong.

What Insurance Do Electricians Need?

Electrical work carries distinct risks. From navigating live wires to managing expensive tools, your business faces exposure to accidents, property damage, and legal liabilities. To safeguard your livelihood and your employees, you need a robust safety net.

Here is a guide to the key types of business insurance policies every electrician should evaluate.

General Liability Insurance

This is widely considered the starting point for electrician insurance. It covers third-party bodily injury and property damage claims. If your work accidentally causes harm to a client or their property, this policy helps pay for legal defense, settlements, and medical costs.

Example: While you are rewiring a living room, a homeowner trips over your tool bag and fractures a wrist. General Liability would handle the medical expenses and legal costs if the homeowner sues.

Workers’ Compensation Insurance

Electrical work is physical and dangerous. If you have employees, most states legally require you to carry this coverage. It steps in if a worker gets hurt or sick because of their job duties. It provides for medical bills, rehabilitation costs, and lost wages during recovery.

Example: An apprentice suffers an electrical shock while working on a breaker panel and needs emergency care. Workers’ Compensation pays for the hospital visit and their wages while they are unable to work.

Commercial Auto Insurance

Your work trucks and vans are essentially your mobile offices. Personal auto policies usually exclude accidents that happen while driving for business. Commercial Auto Insurance fills this gap by covering liability and damage if you or your crew get into an accident in a company vehicle.

Example: You are driving your work van to a service call and rear-end another vehicle at a stoplight. This policy covers damage to the other car and any medical injuries involved.

Inland Marine Insurance (Tool and Equipment Coverage)

Since electricians rarely work in one fixed location, your tools are constantly on the move. Inland Marine Insurance protects your equipment, such as meters, drills, and generators, while they are in transit or at a job site. It pays to replace items if they are stolen or damaged.

Example: You park at a commercial job site, and someone breaks into your truck, stealing thousands of dollars in copper wire and power tools. Inland Marine coverage helps you replace the stolen gear so you can get back to work.

Professional Liability Insurance

Also known as Errors and Omissions (E&O), this covers financial losses resulting from mistakes in your professional advice or workmanship. Even if no physical damage occurs immediately, a mistake that costs a client money can lead to a lawsuit. The average cost for this protection is roughly $71 per month.

Example: You design a lighting layout for a retail store, but the wiring cannot support the load you calculated, forcing the client to delay their grand opening. If the client sues for the lost revenue, Professional Liability helps cover the legal claim.

Business Owner’s Policy (BOP)

A BOP is a cost-effective way to bundle essential coverages. It typically combines General Liability and Commercial Property insurance into one package. This is often cheaper than purchasing the policies separately and is great for small to medium-sized electrical contracting businesses.

Example: A pipe bursts in your office, ruining your drywall and customer files. The BOP covers the property repairs and the liability risks associated with the incident.

Umbrella Insurance

Sometimes a standard policy limit is not enough. Umbrella Insurance provides an extra layer of liability protection that sits on top of your General Liability or Auto policies. It activates when a claim exceeds the dollar limit of your primary coverage.

Example: A faulty installation sparks a massive fire in a luxury apartment complex, resulting in $1.5 million in damages. If your General Liability policy only covers up to $1 million, Umbrella Insurance picks up the remaining $500,000.

Business Interruption Insurance

If a disaster forces your business to pause operations, your bills still need to be paid. This insurance replaces lost net income during a temporary closure caused by a covered event, such as a fire or severe storm. It ensures your business can survive until you are operational again.

Example: A tornado damages your warehouse, making it impossible to access your supplies or dispatch your fleet for two weeks. Business Interruption insurance compensates you for the income you would have earned during those two weeks.

Commercial Property Insurance

This policy protects the physical assets you own or lease at your main business location. It covers the building structure itself as well as the contents inside against perils like fire, theft, and vandalism.

Example: A fire breaks out in your headquarters, damaging the roof and the storage area. Commercial Property insurance pays for the structural repairs to your building.

Hired and Non-Owned Auto (HNOA) Insurance

If your business ever relies on vehicles you do not own, you need this coverage. It protects your business from liability if an employee causes an accident while driving their personal car or a rented vehicle for work tasks.

Example: You are short on supplies, so you ask an employee to drive their personal sedan to the supply house. On the way, they hit a pedestrian. HNOA protects your business from the resulting lawsuit.

Business Personal Property (BPP) Insurance

While Commercial Property covers the building, BPP specifically covers the movable items inside your office or shop. This includes furniture, computers, and inventory that stays at your primary location.

Example: A thief breaks into your office overnight and steals your dispatch computers and office furniture. BPP insurance covers the cost to replace these items.

Cyber Liability Insurance

As electricians increasingly use software for scheduling, billing, and storing client data, digital risks rise. This insurance covers the costs associated with data breaches and cyberattacks, including legal fees and credit monitoring for affected customers.

Example: Hackers infiltrate your invoicing system and steal the credit card information of 50 local clients. Cyber Liability Insurance helps pay for the required notifications and legal fallout.

Cheapest Business Insurance For Electricians

The cheapest option for overall electrician business insurance is biBERK, with an average annual cost of $450.

Note: These estimates are based on a typical entry-level policy for a single-person electrical contractor with a low-risk profile. Actual premiums will vary based on your location, revenue, and years in business.

Cheapest Electrician General Liability Insurance

The cheapest option for General Liability coverage is biBERK, with an average starting cost of $335.

Note: These estimates are based on the lowest available “starts at” rates for general liability coverage for electricians. Actual premiums will vary depending on your policy limits, deductible choice, and state requirements.

Cheapest Electrician Business Owner’s Policy

The cheapest option for a Business Owners Policy (BOP) is biBERK, with an average annual cost of $495.

Note: These estimates are based on a standard BOP bundle, which typically includes general liability and commercial property/equipment coverage. Actual premiums will vary based on the value of the equipment insured and your specific coverage needs.

How Much Does Business Insurance Cost For An Electrician?

Electricians pay an average of $73 per month for general liability insurance. Several factors influence the cost of coverage, including your business location, the number of employees, the types of services you offer, the records you keep, your claims history, and whether you transport expensive tools.

Insurers also consider the amount of coverage you choose and whether you package policies together. While it may be tempting to go with the cheapest option, it’s important to choose a plan that truly protects your business from its most likely risks.

Note: The estimates above are based on national averages for small to mid-sized electrical contracting businesses with standard risk profiles. Actual premiums will vary significantly depending on factors such as the business location, number of employees, claims history, and specific coverage limits selected.

How Is Your Business Insurance Cost Calculated As An Electrician?

Insurance providers calculate your premiums by assessing the specific risks associated with your electrical contracting business. The most significant factor is usually the nature of your daily operations. For instance, if you handle commercial projects like installing heavy-duty panels in hospitals or manufacturing plants, you face greater hazards than someone doing simple residential repairs. This exposure to high-voltage systems generally results in higher premiums.

The scale of your business is another major consideration. Underwriters assume that higher annual revenue and expensive contracts equate to more liability exposure. Your location matters as well. You may see increased costs if you operate in areas with high rates of tool theft or frequent natural disasters. Additionally, local state regulations and building codes often dictate the minimum coverage you must buy.

Finally, insurers look at your assets and track record. A history of prior claims marks you as a higher risk to the provider. The total value of your equipment, whether you own or rent work vans, and even your business structure, can all shift the final price.

Following these steps helps ensure you’re properly insured and set up to handle risks confidently and professionally.