The Insurance requirements for HVAC Contractors can be very complicated. This page is designed to provide a very clear and concise description about the types of Insurance and Bonds you will need in order to protect your Business and satisfy the requirements of your clients and the municipalities where you will work.
After reviewing, contact our agency and we will work with you to design the right coverage with a very competitive premium for your Business:
The Coverage You Will Need
1. What is HVAC General Liability Insurance:
Unfortunately all businesses are subject to lawsuits. No matter how careful you are or how well trained your employees are, accidents still happen.
General Liability Insurance will protect your company from accidents that result in property damage, bodily injury and more.
- If you are a Commercial Missouri Heating and Cooling Contractor, you will likely be required to have a minimum of:
- $1,000,000 Each Occurrence Limit (the most the company will pay per claim) and
- $2,000,000 General Aggregate, (the most the company will pay per policy term)
How much is HVAC Liability Insurance
The Premium charged by the Insurance Company will be determined by your estimated annual payroll for your HVAC Technicians during the policy term and subject to the actual (since you can only estimate your payroll at the beginning of the policy term) payroll at the end of the policy term.
If you are just starting your Business and you will be the sole HVAC Technician, a good Liability premium estimate would be between $500-$800 per year and this would apply for limits up to a $1,000,000 per occurrence.
As the Owner/Officer of the Business, your estimated payroll is not required. The Insurance Companies use a flat payroll amount for Officers.
The General Liability Policy has to issue correctly for Your Business:
General Liability (GL) coverage is not uniform. If you ask 2 Heating and Cooling Contractors how many pages their General Liability Policies have, you can almost guarantee you will get two different answers.
As the saying goes the "Devil is in the Details" – with GL policies the Devil lies in the Several Exclusion and Limitation endorsements that are often added (and should be removed) to an HVAC Business Owner's GL Policy – not to mention the Additional Coverage endorsements that should be added.
The addition of any one of these Exclusion or Limitation endorsements or the absence of an Additional Coverage endorsement can prove devastating for a business owner at the time of loss.
There has to be a Solid Understanding of your Operations in order to make certain the policy issues correctly and Your Business is properly protected. This can not be accomplished with an online policy.
HVAC Contractors General Liability Insurance Video:
Contact us today:
2. Workers Compensation for Contractors
Heating and Air Conditioning Contractors are required to have Workers’ Compensation in Missouri with even with just one employee (Non-contracting employers are required with 5 or more employees).
Missouri HVAC Contractors that do not have coverage may be subject to a significant financial penalty from the State. However, even more importantly, any Missouri Employer without Work Comp coverage is subject to Civil Suits brought against them by their injured employees.
It only makes sense to have HVAC Work Comp coverage to protect your employees and your Business.
Contact us today for a Work Comp Proposal for your Business:
Ph. 636-519-0059 or
3. Business Auto Insurance
One of the most common Insurance claims for HVAC Contractors are auto accidents. Your operation requires the use of good sized vehicles, with a significant amount of added weight in project material and tools and a lot of weekly miles.
Claims latter in the day are more common as good hardworking technicians may be fatigued and more susceptible to distraction.
Due to the very sizeable Bodily Injury Claims that can result from Auto accidents, a Combined Single Limit* of no less than $1,000,000 to protect your business is strongly recommended. The difference in premium between $1mil and $500,000 is typically not that significant.
*Combined Single Limit = The limit of protection for Bodily Injury and Property Damage Claims.
4. Bonds for HVAC Contractors
License and Permit Bonds for Plumbing Contractors
A license and permit bond guarantees that your business will operate in compliance with the building codes established by State, County, City, etc. The bond is a requirement to receive your Electrical Contracting License from a Municipality.
- St. Louis County, MO requires HVAC and Mechanical Contractors to have a $10,000 License and Permit Bond
- A good annual premium estimate is about $100
If you are a new Business and a Union Pipefitter, you will be required by the Union to have a Wage and Benefits Bond (aka Wage and Welfare Bond).
This Bond is a guarantee that required wages will be paid to all employees and benefits (agreed to in the Collective Bargaining Agreement) will be paid to the Union.
If a MO Union Employer does not compensate employees or pay agreed benefits to the Union, the Union can seek recovery from the Bond Carrier.
Wage and Welfare Bonds are considered higher risk as they account for more claims relative to other types of Bonds. Accordingly, if an Employer has poor credit, this Bond could prove challenging to obtain.
Your Clients and Municipalities will want proof that your Business is Insured:
The Municipalities, where you are licensed to operate, will require you to provide proof of Insurance.
Many Clients (especially Commercial Clients) will also require you to provide proof of Insurance before you are allowed to start a project (and maybe again before they will pay you for your work).
To do this, you will simply call or email us and let us know who requires proof of Insurance and we will send your Certificate of Insurance to your client and copy you.
The following video illustrates a sample Certificate of Insurance (COI) and what your client will be looking for on the COI.
Whether you are just staring your business or have been operating for years, contact our Office for an Insurance Proposal for your Business.
Ph. 636-519-0059 or
Additional Coverage Considerations:
The following page provides details on other Lines of Coverage you may want to consider for your Business or potentially may be required to have contractually to start a project.
Additional Coverage for HVAC Contractors