Do I Need to Insure My HVAC Business?

a pair of leather gloves and a tool bag on top of an air conditioner undergoing repair

HVAC contractors have one of the most important jobs in society today. This is especially true in areas that experience extreme temperatures in the summer or winter because heating and air conditioning systems can be lifesaving.

HVAC contractors are in the business of protecting the comfort and safety of others, but it is equally important to help protect the safety and comfort of your business and yourself by carrying a quality insurance policy. Without insurance you run the risk of losing business, paying excess costs from accidents, and even potentially losing your business.

Call an agent today to learn more about how to help protect your business at 1-800-690-3818.

What are the risks of running an HVAC business without insurance?

There are a variety of risks associated with both not carrying insurance and not carrying the proper insurance to help protect your business in the case of an accident. Perhaps the most obvious risk is the possible financial consequences. If you are uninsured and your business suffers a loss you will likely be responsible for paying for all repairs out of your own pocket. This loss can be something like a natural disaster, like a fire, or a unit breaking and damaging a client’s house. Both of these instances may be covered under the right insurance policy, but without it, they could cost you thousands.

There is also the risk of being underinsured and experiencing these accidents. If you are carrying a smaller policy than you need for the value of your business, either in an effort to mitigate costs, or because you simply don’t know what your company is worth, you could still end up paying thousands of dollars out of your own revenue for damages even if you are carrying an insurance policy. It is important to make sure that you are carrying the correct coverage for your correct business value.

There are other important risks to consider before purchasing an insurance policy and understanding them is the first step in avoiding them.

  • Legal action: Your customers could take legal action against you regarding injury or damage in specific circumstances, like incorrect repairs, or repairs that cause more damage. If this happens, you could not only be forced to pay damages in a lawsuit, but you could also owe lawyer’s fees associated with the lawsuit.
  • Non-compliance: The federal government and most state governments require certain insurance policies for different types of risks. If you are not carrying these policies, you could be at risk of fines, penalties, and even the revocation of your business license.
  • Loss of business: This comes as a result of the most severe consequences for the risks discussed above. If you are required to pay for more damages or costs from a lawsuit than your company can afford, or if you get your licenses revoked as a result of not carrying the proper insurance you could lose the business you spent valuable time, money, and effort to cultivate.

While insurance can be expensive, the risks and potential fees associated with not carrying it far outweigh the cost of proper insurance. You don’t want to lose your business because you were trying to save a few dollars.

What are the benefits of carrying insurance?

The primary benefit is having some protection from the worst consequences listed above. An HVAC insurance policy can work to help protect you from legal action regarding a covered event. These covered accidents can be something like damage to a client’s home, a workman’s compensation case, or even an advertising accident regarding copyright infringement can be covered under the right policy. You could also have some protection from financial consequences regarding the same covered accidents, as well as coverage for your commercial vehicles and your equipment if you are in a car accident while driving from one worksite to the next. An insurance policy can help cover damage, lost wages, or even hospital bills.

Another, less obvious, benefit is that you open the door to greater business opportunities by carrying an insurance policy. Some clients, whether that is a homeowner or a landlord or an office manager, will expect you to carry an insurance policy protecting them from any damages before they will be willing to hire you. By carrying the correct type of policy, you are allowing yourself to create the most revenue and traffic for your HVAC business.

What insurance coverages are most important?

There are many different types of coverage that you can add on to your policy depending on what your needs are, but there are a few that can be important for every business.

  • Commercial auto: This might seem confusing if your work vehicle is already covered under a personal auto insurance policy, but it is incredibly important. Traveling between jobsites may be considered commercial use and your personal policy may not cover any losses that happen during these trips. If you were found at fault for an accident during one of these trips, you might be financially responsible for damages to your vehicle, and any other damages sustained to another person or their property.
  • General Liability: This insurance is required by law in most states for HVAC businesses. This type of insurance helps protect others if they or their property are damaged from your business materials. If a unit breaks from your covered actions and creates water damage in a client’s house this insurance could help cover those costs. Liability insurance will not cover the costs of damages to your materials, however, so those would need to be covered under separate coverage.
  • Inland Marine: While the name might be confusing, this insurance helps protect your tools and equipment. If you are carrying inland marine coverage and you are in a covered accident that damages your drills, your insurance may be able to help pay for repairs or replacement equipment. There might be a deductible associated with this type of insurance.
  • Worker’s Compensation: If one of your employees is injured on the job, worker’s compensation may help cover those costs. Many states require a worker’s compensation policy in order to protect workers. Make sure to speak with an insurance agent to find out what your state requires.

The cost of insurance might seem like an unnecessary expense, but when faced with the potential consequences of not having the proper insurance policy it becomes one of the most necessary business expenses.

Call an insurance agent for a free quote today at 1-800-690-3818.

Disclaimer: HVAC Insurance is a marketing site for Infinity Insurance Agency, Inc.

The content is provided on an "as is," and "as available" basis without representation or warranty of any kind whatsoever. All statements are subject to the terms, exclusions, and conditions of the applicable policy.