How much does HVAC contractor insurance cost?

HVAC installation contractors pay an average of $78 per month, or $941 per year, for general liability insurance, sometimes called public liability insurance. Some HVAC installation businesses need proof of insurance for this policy to sign a commercial lease or a client contract.

A general liability insurance policy can cover HVAC installation accidents that harm a third party (non-employee or property), such as damage to a client's home while moving an air conditioning unit.

It also helps pay for legal costs if someone sues your business over a bodily injury, property damage, copyright infringement, or advertising injuries.

This is the average policy for HVAC installation contractors who buy from Insureon:

Premium: $78 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $500

Insureon’s licensed agents typically recommend a business owner’s policy (BOP) for small, low-risk HVAC installation businesses. This insurance package combines general liability coverage with commercial property insurance at a discount to protect your HVAC systems and other business property.

For HVAC installation businesses, the average premium for a business owner's policy is $124 per month, or $1,493 per year. You can also add business interruption insurance to protect against financial losses from a forced closure due to a fire or storm.

HVAC companies that are medium-sized and/or higher risk should consider a commercial package policy (CPP).

A commercial package policy also combines your general liability coverage with property insurance, but offers more flexible protection options than a BOP. The average cost for a CPP is $170 per month, or $2,038 per year.

General liability insurance costs depend on factors such as the coverage limits you choose, the size of your business, the amount of foot traffic, and any subcontractors or additional insured endorsements. Learn more about how your premium is calculated.

HVAC installation companies pay an average of $223 per month or $2,672 annually for workers' compensation insurance. This policy covers medical expenses and disability benefits when you or an employee suffers a work-related injury or illness.

Businesses that have employees typically must purchase workers' comp to comply with state requirements and avoid penalties. It's also recommended for sole proprietors and independent contractors, as health insurance plans can deny claims for injuries related to your job.

Most policies include employer's liability insurance, which covers legal defense costs related to workplace injuries.

The cost of workers' comp depends on several factors, primarily the number of employees and their occupational risks.

HVAC installers pay an average of $191 per month, or $2,292 per year, for commercial auto insurance. This type of business insurance pays for property damage and medical bills from accidents involving your company vehicle. It can also cover vehicle theft, vandalism, and weather damage.

Most states require this type of insurance for vehicles owned by an HVAC installation business. For personal, rented, and leased vehicles used for work purposes, look to hired and non-owned auto insurance (HNOA) instead.

Keep in mind that you may need additional coverage, such as a mobile equipment endorsement, for bulldozers, dump trucks, and other heavy equipment.

The cost of commercial car insurance depends on several factors, including the policy limits you choose, coverage options, the number and value of your vehicles, and the driving records of anyone permitted to drive.

HVAC installation businesses and contractors pay an average of $14 per month for contractor’s tools and equipment insurance, or $169 annually.

A form of inland marine insurance, this policy covers your property whether it’s in your office, in transit, or at a job site. Tools insurance can pay for lost, stolen, or damaged tools and equipment valued at $10,000 or less. This includes replacement and/or repair costs.

Standard property insurance policies only cover items at your business location, which is why you may need this policy for HVAC installation work.

You may also need additional coverage like installation floater insurance. This policy is another type of inland marine insurance and protects movable property, such as building materials, while it’s being installed or built by a general contractor during a project.

The cost of contractor's tools and equipment coverage depends on the value of your tools and equipment (e.g., air conditioners, heating systems, etc.) and the type of work you do.

Small businesses pay an average of $145 per month, or $1,740 per year, for cyber insurance. This policy is vital for any installation business that stores personal information, such as customers' credit card numbers, Social Security numbers, or email addresses.

Cyber insurance covers the cost of complying with your state's data breach laws after a cyber incident. It can pay for legal fees, customer notification costs, and other expenses related to a data breach or cyberattack. You may also see this policy referred to as cyber liability insurance or cybersecurity insurance.

The cost of cyber insurance primarily depends on the amount of personal information handled by your HVAC installation company.

HVAC installation professionals pay an average of $82 per month, or $988 annually, for commercial umbrella insurance. This policy helps boost the limits of your underlying general liability, commercial auto, or employer's liability insurance.

Umbrella insurance provides an additional safeguard and helps policyholders meet contractual demands for higher limits. When the underlying policy reaches its limit on a covered loss, commercial umbrella insurance activates to cover any costs over that limit, up to the limit of your umbrella policy.

The cost of commercial umbrella insurance depends primarily on the amount of coverage you purchase.

Installation contractors and businesses pay an average of $13 per month, or $158 per year, for a surety bond.

A surety bond provides reimbursement for your client if you're unable to fulfill the terms of an HVAC installation contract or other agreement. You may need a surety bond to get a contractor's license for certain types of work.

The cost of a surety bond primarily depends on the size of the bond.