Becoming An Insured Electrician: Steps To Take

Electricians play a crucial role in ensuring the safety and functionality of electrical systems in homes and businesses. However, the job comes with inherent risks, and it is essential for electricians to protect themselves with adequate insurance. Electricians are often required to have insurance to safeguard themselves and their businesses from financial losses or legal liabilities resulting from accidents, injuries, or property damage. General liability insurance, workers' compensation insurance, and professional liability insurance are some common types of coverage that electricians may need. Additionally, electrician insurance requirements may vary depending on state regulations and the nature of the work.

Get the right insurance coverage for your business

Insurance is a fundamental aspect of any electrical business. Having the right insurance coverage offers peace of mind and financial security, ensuring that electrical contractors can focus on their work without worrying about unforeseen events.

The electrical trade involves inherent risks, and accidents can happen even with the utmost care and professionalism. Property damage, worker injury, or legal claims can be financially devastating for an electrical business. Therefore, investing in appropriate insurance can save you hundreds or thousands of pounds in the long run.

• Public liability insurance is crucial for electricians. It protects against claims made by third parties, such as clients, visitors, or members of the public, who suffer injury or property damage due to the electrician's fault. For example, if a client trips over an electrician's equipment and gets hurt, public liability insurance can provide financial cover for any payouts.
• Professional indemnity insurance is essential for electricians who offer advice or consultancy services. It protects against claims arising from alleged negligence, errors, or omissions in the advice or services provided. For instance, if an electrician gives incorrect advice that results in financial losses for the client, professional indemnity insurance can cover the legal defence costs and any resulting damages.
• Income protection insurance provides financial support for electricians who are unable to work due to illness or injury. It ensures they can meet their financial obligations and maintain their standard of living, which is especially important for contractors and sole traders who don't have the benefits of a regular employment contract.
• Employer's liability insurance is legally required in some places, such as the UK, for electricians who employ staff. This insurance covers the cost of compensation and legal fees if an employee suffers a work-related injury or illness and makes a claim against the employer.
• Van insurance is vital for electricians who rely on their vans to transport themselves and their equipment to job sites. It provides cover against theft, accidents, and damage that could disrupt their business. Some policies also cover any tools and equipment kept in the van, protecting these valuable assets.
• Tool insurance offers protection against the loss, theft, or damage of expensive tools and equipment that electricians use daily. This insurance ensures that electricians can quickly replace their tools without significant financial strain.
• Hired-in plant insurance covers the cost of repairs or replacements for specialised equipment or machinery rented by electricians. This reduces the financial burden in case of loss or damage to rented equipment.

Additionally, electrical businesses should consider the following types of insurance:

• General liability insurance covers a wide range of accidents and basic risks. It provides financial protection if someone other than an employee gets hurt or if you are held responsible for damaging someone else's property.
• Errors and omissions business insurance (also known as professional liability) helps defend against accusations of making mistakes that cause financial loss to clients. For example, if you are accused of overloading a circuit and causing a failure, this insurance could cover the expenses to fix the problem.
• Commercial auto insurance is usually required for business-owned vehicles and covers medical expenses and property damage.
• Workers' compensation insurance is mandated in most states as soon as you hire your first employee. It helps pay for medical bills and lost wages after a workplace accident.

When deciding on insurance coverage, it is essential to consider the specific requirements of your electrical business, including its size, nature, and the types of projects and vehicles you work with.

Understand the legal requirements for insurance in your state

The legal requirements for insurance for electricians vary depending on the state. In the US, electricians are often required to have insurance to protect themselves against the risks of injury and property damage while working on residential and commercial projects. This insurance can also be necessary to obtain an electrician license, start work on a project, drive for business purposes, hire employees, or repair or replace property.

In Ohio, for example, electrical contractors are required to carry at least $500,000 in contractor liability coverage. Additionally, the cities of Middletown and Hamilton require a minimum of three years of experience in an apprenticeship, along with technical training, to apply for a journeyman electrician license. On the other hand, Colorado requires electrical contractors to have proof of workers' compensation insurance and hold or hire someone with a master electrician license. They must also file an acknowledgment of responsibility from the master electrician.

It is important to note that insurance requirements may differ based on the size and nature of the business, and it is recommended to consult the relevant state and local authorities to understand the specific insurance requirements for electricians in your state.

Protect yourself against accidents and injuries

Protecting yourself against accidents and injuries is paramount when working with electrical equipment. Here are some ways to protect yourself:

Grounding

Grounding electrical instruments creates a low-resistance path that connects to the earth. This prevents the build-up of voltages that may cause electrical accidents. Ensure all equipment is grounded to eliminate unwanted voltage and reduce the risk of electric shock and electrocution.

Guarding

Use guarding as a secondary protective measure to enclose electrical equipment and prevent accidental direct contact. Guard all exposed wires or components and use electrical connectors to join electrical terminators and create an electrical circuit.

Disconnect Machines

Always disconnect machines before servicing or repairing them. Use insulators such as mica, glass, plastic, or rubber over metals and conductors to reduce the flow of current.

Extension Cord Safety

Do not plug two extension cords together. Minimise the use of extension cords as much as possible. Never nail cords into place; instead, use electrical tape. Do not cover power cords with rugs or mats, as this may create tripping hazards. Always grip the plug when unplugging, and do not pull or yank cords. Do not use equipment with broken cords or missing prongs. Regularly inspect all electrical cords, and if you see any signs of damage, stop using the equipment and call a professional.

Wet Conditions

Never operate electrical equipment in wet conditions or with wet hands. Water significantly increases the risk of electrocution, especially if the equipment's insulation is damaged. If electrical equipment gets wet, bring in a qualified electrician to inspect it before energising it.

Circuit Protection Devices

Use circuit protection devices such as circuit breakers, fuses, arc-fault circuit interrupters, and ground-fault circuit interrupters. These devices will automatically limit or stop the current flow in the event of a ground fault, short circuit, or overload in the wiring systems.

Overloading Sockets

Do not plug multi-outlet bars into other multi-outlet bars. Do not overload sockets. If there are multiple connections, use a power board, but only one per wall outlet.

Heated Wires

Ensure wires are suitable for their electrical load. Overheated wires are a fire risk, so be vigilant for signs of wires getting heated.

Safety Assessments

Do not ignore electrical hazards, as they can lead to serious injuries. Conduct regular safety assessments of the workplace to identify hazards and create a plan to address them.

Check-in Safety System

Implement a check-in-based safety system for workers, especially those working alone. This system ensures that workers can receive help if needed and that everyone in the workplace is accountable for each other's safety.

Choose between different types of insurance policies

There are several types of insurance policies that electricians are required to carry or should seriously consider investing in. Overall, it is important for electrical contractors to have a comprehensive insurance plan in place to protect their business and employees against potential liabilities and risks. Here are some of the different types of insurance policies that electricians should consider:

• General liability insurance: This type of insurance covers claims of property damage and personal injury that may occur as a result of the services provided by the electrician. It also covers legal fees in case of a lawsuit. For example, if a faulty connection damages appliances, your general liability insurance would help to pay for those damages.
• Errors and omissions insurance: This type of policy offers protection against any negligence claims or claims stating that the electrician failed to perform a promised service. It covers legal defence fees, negligence (whether true or alleged), and damages that occur after the service is completed.
• Commercial property insurance: If your business operates out of a physical location, it is wise to have commercial property insurance. This policy will protect the building and its contents. If there is an act of vandalism or damage due to a storm, this coverage will help pay for any necessary repairs or replacements.
• Workers' compensation insurance: If you employ a staff, workers' compensation insurance is a must. In most states, it is a legal requirement. This type of coverage will pay for any injuries or illnesses your employees may sustain while on the job, including medical care and lost wages. In the event of an employee's death, this policy will also pay out death benefits to their dependents.
• Contractors' equipment coverage: Electricians use expensive tools and equipment on the job, and if they are damaged, the cost of replacing them can be extensive. Contractors' equipment coverage will protect these tools and equipment.
• Business income insurance: This type of insurance helps recover lost income if you cannot operate your business due to covered property damage. It is particularly useful if you are unable to work due to an unexpected event, such as an injury or illness.
• Hired and non-owned auto insurance: This type of insurance protects you and your employees when using personally owned or rented vehicles for business. It covers claims of property damage or bodily injury to someone else while on the road.
• Employment practices liability insurance: This type of insurance protects your business from claims related to employment practices, including discrimination, sexual harassment, or wrongful termination.

These are just a few examples of the types of insurance policies that electricians may need to consider. The specific requirements and recommendations can vary based on location and the nature of the business. It is always a good idea to consult with a reputable insurance agency to determine the most suitable insurance policies for your electrician business.

Know the benefits of being a licensed electrical contractor

Being a licensed electrical contractor comes with a host of advantages. Firstly, it grants you the freedom to work across various industries and fields, from assisting in the repair of downed power lines to designing and installing electrical systems in residential, commercial, or government facilities. Here are some more benefits of being a licensed electrical contractor:

Expertise and Experience

Licensed electrical contractors possess the knowledge, skills, and experience to tackle a broad range of electrical projects. They are well-versed in modern electrical technologies and techniques, enabling them to offer tailored solutions to meet the unique needs of their clients. Their expertise ensures efficient diagnosis and resolution of complex electrical issues, giving clients confidence in their ability to deliver high-quality work.

Safety Assurance

Electrical work is inherently dangerous, and licensed electrical contractors prioritize safety above all else. They are well-trained in adhering to local and national electrical codes and regulations, ensuring that all installations, repairs, and maintenance work is performed safely and up to code. By hiring a licensed professional, you reduce the risk of electrical hazards such as fires, shocks, and burns, protecting yourself and your property.

Reliability and Efficiency

Licensed electrical contractors are known for their reliability, providing high-quality services and responding promptly to emergency calls. They are punctual and committed to completing jobs within the agreed-upon timeframe. Their expertise and experience also translate to cost savings for clients, as they can efficiently complete jobs, minimizing disruptions to daily routines and preventing costly mistakes or the need for rework.

Customized Solutions

Licensed electrical contractors take a personalized approach, tailoring their services to meet the unique needs of each client. They consider factors such as energy efficiency, safety, and cost-effectiveness to recommend the best electrical solutions for homes or businesses. By working closely with clients, they ensure that the electrical system exceeds expectations and meets specific requirements.

Enhanced Home Energy Efficiency

Licensed electrical contractors can help improve your home's energy efficiency. They maximize electricity usage by installing and configuring advanced electrical systems, allowing you to utilize less energy while enjoying all the benefits of modern electrical conveniences. This not only reduces your environmental footprint but also leads to cost savings on your energy bills.

Access to Resources and Opportunities

Licensed electrical contractors have access to the necessary tools, equipment, and industry connections. They can guide you in obtaining the required permits for electrical work and provide valuable insights into the latest electrical systems available in the market. Additionally, they have the option to hire apprentices, journeymen, or master electricians to expand their business and take on larger projects.

Frequently asked questions