Insurance for Ontario HVAC Contractors

Insurance for Ontario HVAC Contractors

January 19, 2023 / 5 mins read

You’re in high demand when a furnace or air conditioner breaks down.

Your make sure that heating, ventilation, and air conditioning (HVAC) systems work properly, providing cool or warm temperatures with clean air. It’s important to have the right HVAC insurance package to protect your business.

Ask your Western business insurance expert about the HVAC insurance package you need as an Ontario HVAC contractor.

We’re here to help you get the right HVAC insurance policy whether you’re in North Bay, Parry Sound, Barrie, Huntsville, the Greater Toronto area, Kitchener, Woodstock, Windsor or anywhere in Ontario where you are operating this kind of business.

What kind of HVAC insurance package do I need?

You work in homes, offices, and businesses and that means your job is not without risk.

Your Ontario HVAC insurance package can provide coverage for risks such as an equipment breakdown, theft, property damage, a fire, getting sued, or somebody getting hurt because of your work.

Here are insurance coverages recommended for your Ontario HVAC business:

Commercial General Liability Insurance (CGL): The most important type of insurance your Ontario HVAC business needs is commercial general liability.

If you cause a customer bodily harm, this type of insurance will help pay for the medical expenses related to your customer.

If you damage a piece of property, the policy will help pay the repair costs.

What if your work on a ventilation or air conditioning system causes moisture problems in a client’s home or in a business and you get sued for property damages? CGL insurance can help cover your business’s legal expenses and repair costs associated with the incident.

Your CGL policy also helps protect you from libel, slander, copyright infringement, and false advertising allegations.

Without commercial liability insurance, you would be responsible for paying any liability costs out of your own pocket.

How much CGL insurance do I need as an HVAC contractor?

It depends on the size of your HVAC business. Do you operate a large HVAC company, or you are a small business with several employees? That will help determine the amount of CGL insurance that you need.

If you are an HVAC contractor working inside residential or commercial properties and you are fixing, repairing, and or installing heating and air condition units, then it’s expected that you carry a minimum of $2 million in CGL insurance. A higher liability limit will be expected if you have a large HVAC business.

Ask your Western business insurance expert how much CGL insurance your Ontario HVAC business needs.

Professional Liability Insurance: It’s also known as Errors and Omissions (E&O) insurance. This type of insurance provides financial protection and covers legal fees and judgments if a dissatisfied client sues your HVAC company for the following:

  • Work errors and errors in design
  • Incomplete work or failure to fulfill the job contract
  • Misrepresentation of services or skills
  • Violation of good faith and fair dealing
  • Inaccurate advice given to customers
  • Alleged or actual negligence

Professional liability insurance limits coverage to owners and employees and they do not cover work done by subcontractors. It also does not cover non-financial losses or losses caused by intentional or dishonest acts.

It pays for any damages related to your work or the job site after your HVAC company finishes the work and which results from your negligence, errors, or omissions. It does not cover work that’s in progress or damages already covered under your general liability policy.

Tools and Equipment Insurance: This type of insurance is also known as HVAC equipment insurance, and it protects your business’s tools and equipment. If your tools or equipment are stolen, lost, or damaged, this policy may cover the repair or replacement costs. Anything valued at less than $1,500 is considered a tool and anything above that limit is considered equipment.

Make a list of your tools and equipment and show it to your Western business insurance expert.

Commercial Property Insurance: Where are your HVAC business operations located? This type of insurance can help keep you protected from property losses, such as theft or vandalism. You can also add earthquake insurance, sewer backup or flood coverage extensions.

You’ll need to do an inventory of all your business property to determine how much commercial property insurance you will need. Your Western business insurance expert can help you with this.

Commercial property insurance protects your HVAC business office and its contents.

Property you may need to insure:

  • Buildings and other structures
  • Furniture, equipment, supplies
  • Inventory, computers
  • Documents such as payroll, accounts receivable

Business Interruption Insurance: This coverage supports you when your HVAC business can’t operate due to a covered loss.

There are a number of losses that can force your HVAC business to shut down. Some examples include:

  • Damage to your equipment from fire or vandalism
  • A major reduction in revenue due to a client/supplier facing losses of their own
  • A disruption in your supply chain

Business interruption insurance can help with expenses such as:

  • Payroll
  • Rent
  • Utilities
  • Property taxes
  • Alarm monitoring
  • Relocation of your business

This type of insurance can be the difference between recovering from a loss and closing permanently.

Pollution Liability Insurance: It is a specialized type of coverage that will protect you against pollution-related accidents that cause third-party injury or property damage. If your HVAC work causes a pollution hazard, your business will have protection.

Ask your Western insurance expert about pollution liability insurance as part of HVAC insurance package.

Commercial Auto Insurance: If you have a business van(s) or business car(s) that you use for your business, you will need commercial coverage as part of your HVAC business insurance package. These vehicles are not covered by your personal car insurance policy.

If you have a large HVAC operation, you will need fleet insurance if you own five or more vehicles and use them exclusively for business purposes.

Surety bond: Once you accept a job from a client, you are obligated to complete it. A surety bond is a type of business insurance that will pay your client if you fail to complete a job.

If you go out of business, go bankrupt, or otherwise fail to finish the job, your customer can file a claim to get financial compensation with your insurer to have their costs covered, up to a maximum amount.

You may be required to have a surety bond before accepting a contract. Only companies licensed by the Surety Association of Canada may offer you a surety bond.

Ask your Western business insurance expert to go over the details of a surety bond with you and how it can protect your HVAC business.

How much HVAC insurance do I need?

It will depend on the size of your Ontario HVAC business, work performed, number of employees, annual revenue, past claims, and your location.

It’s unlikely that all HVAC contractors would pay the same monthly or annually for their coverage.

Ask your Western business insurance expert to determine the right level of coverage for your HVAC business.

Western Insurance has licensed BUSINESS INSURANCE EXPERTS to get your Ontario HVAC business the right insurance package. Our experts are available now to help you navigate the business insurance journey to protect your HVAC business.

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