How Much Does HVAC Contractor Insurance Cost? (2023 Rates)

Thang Truong
Thang Truong
Updated on:

When an air conditioner breaks down on an uncomfortably hot day, you’re in high demand as an HVAC contractor. But all those won’t stop your clients from throwing unexpected lawsuits your way if you do not protect yourself with quality insurance when property damage or injuries occur.

Keeping customers’ homes warm, cool, and free of excess water and dangerous gas entails a significant liability risk. This job can injure HVAC workers and can also injure and damage residential and commercial customers’ property, potentially resulting in costly lawsuits.

If you are an HVAC contractor looking to insure yourself, keep reading to determine how much you’ll need to buy HVAC contractor insurance for your company. 

How much does HVAC contractor insurance cost?

The average cost of HVAC contractor insurance is $732 per year, or $62 per month. That is for a Business Owners Policy (BOP), one of the most popular insurance policies for HVAC contractor. It is a bundled policy, including both general liability and commercial property coverages in one policy.

HVAC contractors may need other insurance policies. The more policies you have, the more expensive your premiums will be. Below are the average cost of different coverages HVAC contractors may need.

HVAC contractor insurance coverages Average costs
Business Owners Policy$62 per month
General liability insurance $45 per month
Commercial auto insurance $105 per month
Workers comp insurance$135 per month

Keep in mind that these are just the averages. Your rates will be different. Be sure to shop around with a few companies to compare several quotes to find the cheapest one for your business. Shop with a top broker like InsurePro, CoverWallet, or Simply Business is a great way to compare several quotes online in one place conveniently.

General liability insurance cost for HVAC contractors

General liability insurance covers any damages you (or an employee) may be accused of causing to a third party.

This is the most important HVAC insurance you can buy, so it’s at the top of our list. General liability insurance protects you from any legal claims that may arise as a result of an accident. These claims can be extremely costly, depending on the extent of the damage, so you’ll be glad your insurance company is footing the bill.

On average, general liability insurance for HVAC service technicians costs $45 per month.

Learn more at general liability insurance cost and the best general liability insurance companies.

Worker’s compensation insurance cost for HVAC contractors

This protects employees in the event they are injured on the job. Most states require this type of HVAC business insurance. Worker’s compensation can help cover medical bills for work-related injuries and protect against lawsuit costs, depending on the nature of your fieldwork. Even if you hire the best team of employees, you never know what might happen, so this insurance is a must.

The average cost of workers comp insurance for HVAC contractors is $135 per month.

Learn more at workers comp insurance cost and the best workers comp insurance companies.

Errors and omissions (E&O) insurance cost for HVAC contractors

This protects you if a customer sues you for breach of contract. This type of insurance, also known as professional liability insurance, is intended to protect your HVAC company from civil lawsuits, professional errors, and negligence claims. It differs slightly from general liability, which covers third-party accidents on the job.

Even if you’ve worked in the HVAC industry for a long time, mistakes happen—and your reputation matters. Errors and omissions insurance allows you to move on from client disputes quickly and smoothly, rather than escalate into high-profile court cases with large payouts.

The average cost of an E&O insurance policy for HVAC contractors is $30 per month.

Learn more at the E&O insurance cost and the best E&O insurance companies

Commercial auto insurance cost for HVAC technicians

For all of your HVAC vehicles, you’ll need auto insurance. Auto insurance protects your company vehicle or fleet from the costs of car accidents, including legal fees and repairs that may occur while you’re driving for work. Your personal auto insurance policies won’t cover you if you use a vehicle for your work-related traveling, ie. driving from your office or home to your work location or driving from one work location to another. Learn more why you need to have commercial auto insurance

The average cost of commercial auto insurance for HVAC contractors is $105 per month.

Learn more at commercial auto insurance cost and the best commercial auto insurance companies

Commercial property insurance cost for HVAC contractors

If you own or rent your facility, you’ll need property insurance. In the event of a fire, vandalism, theft, or other disasters, property insurance for HVACs can cover supplies and equipment that have been damaged or stolen. 

Think of what could be at stake if you walked into your workspace one morning and you find it destroyed by fire. Your property insurance should help cover the costs of repairs.

The average cost of the commercial property insurance for HVAC contractors is $55 per month.

Learn more at commercial property insurance cost and the best commercial property insurance companies.

What factors affect the cost of HVAC contractor insurance cost?

There are specifics when it comes to HVAC contractor insurance costs. This is because the cost depends on many unique factors for businesses. 

Duration of the doing business

An insurance quote for an HVAC contracting company that has been in business for long and has a relatively clean record is likely to be lower.

Insurance companies assess the risk associated with younger companies that have not been tested over time as higher, just as customers do. So, if you have been an HVAC contractor for less than two years, you may pay more for your premium. 

The history of accidents at your company

Accidents are the major reason why HVAC contractors need insurance. However, having too many accidents does not speak well of your business. If your company has a history of having a lot of accidents in a short period, you’ll probably get a higher rate, a lower limit, or both.

Your credit reports

Bad credit scores indicate that your company may not be able to pay your premiums. Companies with terrible scores may not be able to get a policy at all. If you would, insurers will offer you exorbitant prices to cover the high risk. 

Your workers

The quality and quantity of employees you have will determine the success of your HVAC business. As a result, insurance companies look at how well you train your employees, where they went to vocational school, their current age, how long they’ve been in business, and their personal histories. The more quality staff you employ, the less the chances you will have issues with clients, so your premiums will be less.  

How to find cheap HVAC insurance?

To help you find the HVAC contractor insurance policy at best for your company, follow these guidelines:

Know your state laws

Before deciding which policies you need, check your local and state laws to see if any policies, like auto insurance and workers’ compensation insurance, are required.

Compare quotes

Because insurance rates can vary significantly, it’s critical to compare quotes from three to five companies to find the best deal.

Fill the coverage gaps: 

Most standard insurance policies cover many common risks, but some critical gaps may need to be addressed. So, review your policy to see if you need any additional policies to protect yourself and your company.

What is HVAC Insurance?

HVAC insurance is a policy put together by insurers to protect HVAC contractors from many of the risks they face daily. Suppose you have a comprehensive HVAC contractor insurance package. In that case, the insurer will financially protect your business if an employee or customer files a claim against you for damages caused by your services.

What is covered by HVAC insurance?

While it’s unlikely that a third party or client will be injured during an installation or maintenance procedure, shoddy work can result in health issues or structural damage, which your company could be liable for if you’re not insured.

The following are examples to demonstrate how insurance may protect an HVAC contractor:

Physical Injuries:

At your workplace, injuries that directly affect a third party or client. Air conditioners, for example, must be cleaned and sanitized regularly during a routine inspection. If a client contracts a bacterial infection that affects the respiratory system, insurance may cover the medical bills. The policy may also protect the HVAC contractor from lawsuits and damages.

Physical damage to the property

This includes any damage incurred due to work performed on the affected property. For instance, if an HVAC contractor installs a water heater incorrectly, causing damage to the building for which it is intended to provide hot water. This insurance may cover the repair of the damaged building and the lawsuits. 

Accidental personal injury:

Personal injuries are any harm done to a client’s reputation or image due to your work. For example, a local business’s heating system is damaged during a routine maintenance call and is not reported. As a result, the carbon monoxide detectors in the building are constantly going off, causing productivity delays. Your insurance policy may cover the medical bills and damages incurred as a result.

Injuries caused by advertising:

An advertising injury occurs when a competitor loses assets due to false arguments made by your company in an advertisement. For example, a local competitor sues you for damages based on unfairly lost business after seeing an advertisement you approved stating that your company is the only one that offers ventilation repair.

Medical billing:

A third party or client has incurred medical bills due to an HVAC contractor’s negligence. For instance, a client suffers heat stroke due to an air conditioning failure after installation. An ambulance is dispatched, rehydrating supplies such as IVs are used, and a trip to the emergency room is made. The HVAC insurance may pay for all these costs.  

Insurance requirements for HVAC contractors

Business insurance, like your HVAC certification, is another requirement before you can begin performing any work in the industry. Making sure you meet your business’s legal obligations is essential if you want your business to survive.  

Depending on location, local, state, and federal laws govern HVAC business requirements. In most cases, insurance is required to obtain a license. But this is not always the case—what is optional in one state may be required in another.

Consider Texas as an example. The state requires technicians to be certified in Air Conditioning and Refrigeration (ARC) based on their specific needs. Suppose you’re an out-of-state ARC Technician who wants to help with Texas disaster relief. In that case, you’ll need to get a new in-state license unless you’re from South Carolina or Georgia (with whom the state reciprocates). All work must be done by a Texas ARC Contractor who has the appropriate amount of insurance.

Different states and jurisdictions have their in-state HVAC insurance requirements, including which types are required and which states are reciprocated. You need to find out about state and local HVAC insurance and license requirements in your area.

Best HVAC contractor insurance companies

Many insurance companies offer HVAC contractor insurance. That is a good thing since these companies compete against one another for your business. As a result, you will enjoy better services and lower rates. However, it can make finding the best HVAC contractor insurance companies a bit more challenging. To help you a bit in this search, we have researched and here are the 5 best HVAC contractor insurance companies for your consideration.

  • CoverWallet: Best for comparing several online quotes
  • biBERK: Best for a fast online quote
  • The Hartford: Best for businesses looking for a solid and ethical insurer
  • Hiscox: Best for a flexible payment plan
  • Next: Best for a completely digital experience
Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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