Bonding and liability insurance

[wayne123]

I have been thinking of starting my own electrical contracting business. I am most interested in service work and residential construction. Can anyone advise me on what type of liability insurance to use and how much will I be looking at pricewise?

[bphgravity]

Usually the insurance requirements are mandated by your state licensing board or the local jurisdiction you work in.

For example, here in Florida, we are required to have a minimum of $100,000/per person and $300,000/per occurrence which includes completed operations and products. Property damage insurance is $500,000 or you can have a minimum combined single limit policy of $800,000.

Again, these are only minimum requirements for licensing and you will need to determine you total coverage needs if you plan on doing alot of work and mainly large jobs that the minimum coverage may not cover.

I carry a $1,000,000 coverage and only pay around $700 a year with a repitable agent. Insurance is generally pretty cheap.

[wayne123]

I will be operating in North Carolina. Is your Insurance carrier local to you or is it a large insurance firm? I recently talked with a local carrier and they wanted me to give an estimated yearly income.I have no idea how much I will make, being a one person business I will just take on jobs as they come.

[bphgravity]

I use a local agent that provides the carrier for me, which happens to be a large firm. Going with a local agent allows me to make adjustments and to obtain certificates readily.

You must have some projected estimates as to what your expected income is to be. It will not make that much of difference a couple thousand dollars each way. The carrier is simply trying to determine their risk by how much work your are doing or plan to do. I would be conservative.

[wayne123]

Thanks for your help.

[rickcham]

Wayne123
I am also looking into this for starting my own company in the Virginia area, Some point to keep in mind what ever carrier you chose try to be sure you are not wacked with a $75 - $100 charge everytime you need a certificate. Ask what the charge is for certificates! Also if you plan on doing any commerical bidding a insider to the compainies told me it is best to carry $2,000,000 if you want to be considered to do service work in a commerical property.
And as I was told be sure to figure you gross income a little high if you are over your estimate when they check your books next year you can be hit with paying extra.So it is better to have them adjust and rebate you then pay into a plan
Good Luck

[rich000]

rickcham,

I am in Virginia. The insurance certificates are free. No company should charge for these. If a company charges you for these, no matter what the charge, you should find another carrier.

[wayne123]

Thanks guys, I apppreciate you info. Good luck on your new business Rick.