All About Workers’ Comp For Electrical Contractors

Which Electrical Contractors Need Workers’ Comp Insurance?

In most states, electrical contractors who hire just one employee must carry workers' compensation insurance. In some states, electricians with no employees are still required to purchase coverage for themselves as sole proprietors. 

However, even if your state requires only employees to obtain workers' comp coverage, it is recommended that you purchase a policy for yourself as an owner. Learn why here. 

Electrical contractor workers’ comp insurance can keep you and your business protected from expensive lawsuits. Without it, you risk high costs or personal bankruptcy if a worker is injured on the job.

Why is Electrical Contractor Insurance Important?

Protect your most valuable asset:  

Electrical contractors are among the most dangerous and high-risk professions in the United States. Professionals in this field often work with their hands, use heavy machinery and equipment, operate at heights, and work alongside other contractors or employees who may not follow safety protocols. All of this spells trouble for electricians who may find themselves injured on the job.

To help protect yourself and your employees, it's important to have electrical contractor workers’ comp insurance. This type of policy can provide you with the financial security you need if an accident occurs and you're unable to work. 

It can also cover medical expenses, death benefits, and permanent or partial disability payments in the event that someone is hurt while working for your company.

Defend yourself against legal complications: 

This type of policy can also protect you from lawsuits. If there's an accident at one of your job sites and an employee gets hurt, the workers’ comp policy will kick in and help cover legal costs.  

Workers’ comp will help cover the costs even if the employees weren't properly trained or didn't follow safety procedures. In some states, if there is a workers’ comp policy in place, an employee can not sue an employer for work related injuries. 

Win contracts offered by GCs (and others) 

Almost all general contractors (GCs) will require you to show a certificate of insurance before awarding you a contract. 

Also note that many buildings and property management companies require a Certificate of Insurance (COI) before allowing work to begin. 

Additionally, individual homeowners are becoming more savvy about the importance of insurance and may request to see a COI before you start any electrical work in their residence.

Stay compliant with Compliance with State Regulations:

As previously mentioned, compliance is crucial. Ensure you're adhering to the specific workers' comp requirements of your state.

Electrical Contractor Insurance Requirements

Here are some key requirements for electrical contractor insurance:

Get classified correctly: 

When getting a workers’ comp quote for electricians, it’s important to specify what type of electrical work you do so that you will be classified correctly - and get appropriate coverage. 

For example, it’s important to understand the difference between low voltage work and traditional electrician work, since each one has its unique classification code and associated risks. 

 Low voltage work - Class code 7600 

This classification mainly covers contractors who deal with installation, service, or repair of low voltage systems. This includes systems like alarm systems, telecommunications, coaxial cables, interior internet cable wiring, and other similar networks.

This type of work is not as risky as higher voltage electrical work. Most injuries in this class code are like falls, cuts, and repetitive motions. 

Traditional Electrician Work - Class Code 5190

This classification covers electricians who install, service, or repair electrical systems that can include higher voltage electrical lines, circuit breakers, switches, and lighting systems, among others.

Electricians working with high voltage systems face elevated risks. They are more susceptible to serious electrical burns, electrocution, and other related hazards. 

Know your annual payroll (and subcontractor costs) 

When looking for workers’ comp coverage, it’s important to be prepared with this info: 

• Annual payroll: Insurance carriers calculate your workers' comp premium based on your annual payroll, among other factors. Ensure you have that information ready. 
• Subcontractor costs: If you work with any subcontractors, be prepared to provide their costs as well, as carriers often request this information as well. 

Understand your insurance requirements  

Some of the contractors you perform electrical work for or the job sites you work at may require certain limits of insurance. Some may also require a waiver of subrogation. We’re happy to work with you to find a policy that will satisfy the requirements. 

Get Electrical Contractors’ Insurance Today!

Kickstand Insurance can help you get the electrical contractor insurance that you need. We have a variety of policies to choose from, and we can work with you to find the best coverage for your business.

If you know of electricians who need workers’ comp insurance, contact us today. We can help get you and your team covered, protected, and on your way to a safe job site.