Electrical Contractor Insurance Requirements

There are many requirements that electrical contractors must follow to work legally and safely in their chosen field. In many states, having insurance is one of them. Here we take a closer look at when you may need General Liability* insurance, a common type of electrician insurance often required to work in the United States.

Is electrician insurance required by law in the U.S.?

There is no federal law requiring electrical contractors to have insurance for their businesses. However, there may be state or local laws in your area that do mandate it.

Insurance may be an electrical contractor requirement to get your electrician’s license. Each state and some local jurisdictions have their own licensing rules for electricians. For example, to become a licensed electrician in Ohio, you must have a minimum of $500,000 in General Liability coverage**.

It’s always wise to check the electrical contractor requirements in your area before you start working. You could be hit with fines or business closure if you do not follow the current laws in your area.

What if electrician insurance is not necessary to get licensed?

Electrician insurance may not be required to get licensed in your state, but there are other reasons why you may need a policy. General Liability insurance is a necessary part of many business relationships. Without this coverage, you could miss out on jobs and ways to grow your electrical business.

General Liability insurance may be required by:

• Commercial landlords – You may need to show proof of insurance before signing a commercial lease.
• Businesses you contract or subcontract for – As a contractor or subcontractor, you may be required to have your own liability insurance.
• Business contracts – The clients who hire you may put liability insurance requirements into their project contracts.

How can insurance help manage electrician business risks?

Even if electrician insurance is not necessary for you to do business, you may still consider getting a policy. General Liability can help you manage two typical electrician business risks that come with working on a client’s property:

• Injury claims brought by third parties in the course of your business operations
• Property damage claims brought by these same third parties

Claims and lawsuits caused by injury or property damage are often devastating for small businesses. The cost of fixing the situation or defending yourself in court can potentially drain your bank accounts (both business and personal).

It can be challenging for businesses to bounce back without insurance. However, if you have a policy, your day-to-day operations may hardly be impacted at all.

Finding electrician insurance for your business

General Liability is an essential coverage consideration for electrical contractors. It may be a requirement to join the field, accept specific jobs, and build important business relationships. Electrician insurance can also protect your small business and help you recover if a third-party injury or property damage claim is made against you.

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