HVAC contractor insurance is absolutely vital, yet many owners and contractors find getting HVAC insurance quotes and tailored coverage all too difficult. No more.
At ContractorNerd, we make HVAC liability insurance and business insurance tailored, easy, and data-driven. We’ve analyzed quotes for over 1,100 quotes for HVAC contractors insurance from leading carriers across all 50 states to provide transparency on what you need, what it should cost, and how to get quotes. Let’s get started with the basics.
What Insurance Do HVAC Contractors Need?
For HVAC professionals, selecting the appropriate insurance coverage is crucial and varies based on the size and stage of your business. Here’s a guideline:
- Sole Proprietor HVAC Contractors:
- HVAC Liability (aka General Liability) insurance is fundamental covering damage to property and bodily injury for non-employees. Most clients will ask if you’re licensed and insured.
- Products & Completed Operations coverage, typically included in an HVAC contractor’s General Liability policy, protects against damage claims that arise after job completion, such as water damage from defective AC installations, even when manufacturer defects may be involved.
- Tools and Equipment (aka Inland Marine) coverage is also recommended. This coverage protects your tools.
- A Contractors Equipment & Installation Floater policy provides optional, low-cost coverage for HVAC contractors’ specialized tools, equipment, and materials during transport and installation.
- Contractor’s E&O (aka Faulty Workmanship) protects you in the event one of your clients claims faulty workmanship, materials or products.
- Commercial Auto coverage is needed if you have a work truck.
- HVAC Liability (aka General Liability) insurance is fundamental covering damage to property and bodily injury for non-employees. Most clients will ask if you’re licensed and insured.
- Small HVAC Business (2-3 Employees):
- Workers compensation is if you have employees (not subcontractors)
- Commercial property is important if you own or rent property like workshops, storage areas, or offices.
- Umbrella Insurance (or higher limits on your HVAC Liability) is worth considering as your business grows in revenue and project count.
- Established HVAC Contractor (5+ Employees):
- Employment practices liability insurance (EPLI) to protect business owners against potential lawsuits from employees.
HVAC Liability Insurance – aka General Liability
If there was a single coverage critical for all HVAC contractors, this is it. HVAC businesses need this insurance because your work involves risks to property and others. Types of claims commonly faced include:
- Property Damage: Accidental damage to a client’s building, floors, walls, etc.
- Bodily Injury: A client, visitor or bystander getting hurt due to your work activities.
- Defective Products: Lawsuits over an installed product that turns out defective.(Add-On)
- Completed Work: Lawsuits over issues from past completed jobs. (Add-On)
Liability Limits for HVAC Contractors: Standard policy limits are $1 million per occurrence and $2 million in total (aggregate). Experts typically recommend minimum coverage of $1 million, as increasing coverage from $500,000 to $1 million is a signifiant transfer of risk with minor premium increase.
Liability Premiums for HVAC Contractors: Generally, 1% to 3.5% of your annual revenue. Our quote data below shows how this average premiums from leading carriers fluctuates from state to state. These average premiums are specific to the HVAC industry.
Key Factors Influencing HVAC Liability Premiums Include:
- Revenue: Higher revenue means more work and potential claims
- Policy Limits: Higher limits means more risk and higher premiums
- Claims History: Clean record means lower premiums
- Location: State claims impact premiums
- Class Codes: HVAC contractors mostly use two class codes with the primary difference being Liquefied Petroleum Gas (LPG):
- 95647: HVAC Systems – Sales, Installation & Service (No LPG Equipment)
- 95648: HVAC Systems – Sales, Installation & Service (All Other Categories)
HVAC Insurance Cost – ContractorNerd’s Quotes Study
We crunched the numbers with over 1,100 HVAC Liability insurance quotes from leading carriers for HVAC businesses across all 50 states. While precise rates are highly individualized, average annual premiums for HVAC contractors typically range from:
- Small HVAC Contractor ($150K Revenue, 1 employee) – $800 to $3,000
- Medium HVAC Contractor ($500K Revenue, 3 employees) – $5,400 to $9,000
- Large HVAC Contractor ($1M Revenue, 5 employees) – $10,200 to $18,000
New HVAC ventures starting without history may pay 25%+ more initially. After successfully operating without incidents, premiums often decrease.
Below is a table summarizing typical general liability insurance premiums for HVAC contractors based on a sample of states. Each scenario assumes the following for each revenue size:
- $150K Revenue: Assumes 1 owner and 1 employee with ~10% subcontracting costs.
- $500K Revenue: Assumes 1 owner and 3 employees with ~10% subcontracting costs.
- $1M Revenue: Assumes 1 owner and 5 employees with ~10% subcontracting costs.
| State | $150K Revenue | $500K Revenue | $1M Revenue | |||
| Avg. Premiums | % of Revenue | Avg. Premiums | % of Revenue | Avg. Premiums | % of Revenue | |
| California | $2,500 | 1.7% | $5,300 | 1.1% | $12,000 | 1.2% |
| Texas | $2,900 | 1.9% | $9,400 | 1.9% | $17,900 | 1.8% |
| Florida | $3,100 | 2.1% | $11,600 | 2.3% | $25,600 | 2.6% |
| Pennsylvania | $3,800 | 2.5% | $11,300 | 2.3% | $23,400 | 2.3% |
| Illinois | $4,000 | 2.7% | $10,700 | 2.1% | $21,200 | 2.1% |
| Ohio | $2,800 | 1.9% | $7,100 | 1.4% | $14,500 | 1.5% |
| Georgia | $2,100 | 1.4% | $7,400 | 1.5% | $15,800 | 1.6% |
| North Carolina | $2,700 | 1.8% | $8,000 | 1.6% | $15,900 | 1.6% |
| Michigan | $2,100 | 1.4% | $6,400 | 1.3% | $12,300 | 1.2% |
If you’re interested in learning about HVAC insurance in your state, we’ve created state-specific guides tailored for all 50 states. Feel free to explore these resources to ensure you’re well-informed and adequately protected in your HVAC business.
Potential Savings on Liability Insurance for HVAC Contractors
Working with an independent insurance agent who specializes in HVAC Contractor insurance can yield significant savings and better coverage terms. Below are real savings for HVAC contractors at various revenue levels – same business, different carrier. If your premium looks more in-line with the averages above, we suggest you get quotes to see if you’re able to get the same or better coverage with a more favorable rate.
| State | $150K Revenue | $500K Revenue | $1M Revenue | |||
| Favorable Rate | Implied Savings | Favorable Rate | Implied Savings | Favorable Rate | Implied Savings | |
| California | $1,400 | 44% | $3,700 | 30% | $9,900 | 18% |
| Texas | $900 | 69% | $5,200 | 45% | $11,300 | 37% |
| Florida | $900 | 71% | $6,300 | 46% | $13,800 | 46% |
| New York | $2,700 | 74% | $21,500 | 30% | $36,400 | 40% |
| Pennsylvania | $900 | 76% | $8,900 | 21% | $14,900 | 36% |
| Illinois | $1,300 | 68% | $8,300 | 22% | $13,800 | 35% |
| Ohio | $600 | 79% | $4,600 | 35% | $7,900 | 46% |
| Georgia | $500 | 76% | $4,300 | 42% | $9,500 | 40% |
| North Carolina | $500 | 81% | $3,500 | 56% | $7,300 | 54% |
| Michigan | $500 | 76% | $2,300 | 64% | $3,700 | 70% |
Workers’ Compensation Insurance for HVAC Contractors
For HVAC businesses with employees, workers’ compensation insurance, provides medical care and wage benefits for work-related injuries, with rates varying by state, job roles, and risk levels. The most common class code for HVAC contractors is 5537. The typical rate ranges from $2.24 to $5.14 per $100 of payroll annually per employee.
WC Policy Limits for HVAC Contractors: The policy limits for workers’ compensation typically have no cap but may vary according to state regulations.
WC Rates for HVAC Contractors: The typical premium ranges from $2 to $5 per $100 of payroll.
Factors Influencing WC Premiums for HVAC Contractors:
- Experience Modifier: This reflects your safety record, starting at 1.0 and adjusting based on your claims history. More incidents result in a higher modifier and increased premiums.
- Payroll Amount: Premiums are partly determined by your gross payroll, calculated using the formula: payroll / $100 * rate * experience modifier. Higher payrolls lead to higher premiums.
- State: Workers’ compensation laws, benefits, claims processes, and baseline rates are governed by each state. Geographical differences in the cost of living and medical care also affect premiums.
Most and least expensive states for HVAC Workers Compensation Insurance:
| State | Premium per $100K Payroll |
| New York | $8,160 |
| New Jersey | $6,560 |
| Louisiana | $6,080 |
| Vermont | $5,850 |
| Illinois | $5,190 |
| State | Premium per $100K Payroll |
| North Dakota | $1,590 |
| Oregon | $1,750 |
| West Virginia | $2,040 |
| Ohio | $2,120 |
| Arkansas | $2,140 |
If you’d like to see other state rates and try our calculator, check our guide on Workers’ Compensation Insurance for HVAC Companies.
Additional Insurance HVAC Contractors Should Consider
Tools & Equipment Insurance (Inland Marine)
Inland Marine Insurance protects HVAC tools and equipment during transit and at job sites against loss, theft, or damage. Annual premiums range from $200-$2,000, with policy limits of $5,000-$15,000+. Most policies have per-item limits (typically $5,000).
Contractors’ E&O Insurance
Protects against business mistakes and negligence claims in HVAC work. Covers costs if clients claim faulty work, wrong installations, or subpar service. Includes professional negligence claims, legal defense, and judgments. Annual premiums range from $50-$500, with policy limits of $10,000-$1M+.
Commercial Auto Insurance for HVAC Contractors
Commercial auto insurance protects work vehicles and covers liability from accidents during business operations. Personal auto policies don’t cover business use. Premiums range from $1,500-$3,050 per vehicle annually. Standard limits are $100K per person, $300K per accident, and $100K property damage, though higher limits ($500K-$1M) are recommended for comprehensive protection.
Bonds for HVAC Contractors
Surety bonds guarantee work quality and fulfill licensing requirements. Typical bond amounts range $5,000-$25,000, with contractors paying 1-3% as premium. Premium costs vary by credit score:
| Bond Amount | Excellent Credit | Good Credit | Bad Credit |
| $5,000 | $100 – $150 | $150 – $200 | $200 – $400 |
| $10,000 | $100 – $300 | $300 – $500 | $500 – $1,000 |
| $15,000 | $150 – $400 | $400 – $750 | $750 – $1,500 |
| $20,000 | $180 – $500 | $500 – $1,000 | $1,000 – $2,000 |
| $25,000 | $200 – $500 | $500 – $1,200 | $1,200 – $2,500 |
Requirements vary by state – California requires $25,000 bonds while Texas has no statewide mandate.
Commercial Property Insurance for HVAC Contractors
Commercial property insurance protects buildings and contents (tools, equipment, parts) against fire, theft, vandalism, and weather damage. Essential for HVAC businesses with workshops, warehouses, or showrooms. Annual premiums range $1,000-$5,000, based on property value, location risks (disasters, crime), and building construction type.
Business Owner’s Policy (BOP) for HVAC Contractors
A Business Owner’s Policy bundles general liability and commercial property insurance. This can be a better option for businesses with physical locations, it covers customer injuries, property damage, business assets, and business interruption. Typically you will see lower premiums than separate policies but less flexibility. Premiums based on business size, location, claims history, and additional coverage added.
Commercial Umbrella Insurance for HVAC Contractors
An alternative to increasing your limits on your general liability policy is an umbrella policy. This type of insurance provides additional liability coverage, extending beyond the limits of your standard policies like general liability, auto liability, and employer’s liability. In the event of a substantial claim that surpasses the limits of your primary policies, umbrella insurance steps in, offering extra financial protection. Typically adds $1M coverage (up to $2M+ available). Annual premiums: $500-$1,000.
Employment Practices Liability Insurance for HVAC Contractors
Protects against employee claims of discrimination, harassment, wrongful termination, and other workplace issues. Annual premiums: $1,000-$5,000. Policy limits: $100,000-$1M.
Cyber Liability Insurance for HVAC Contractors
Protects against data breaches and cyberattacks, covering investigation, customer notification, credit monitoring, PR, and legal costs. Policy limits: $100K-$1M. Annual premiums: $300-$1,000.
Why Insure Your HVAC Business with ContractorNerd?
Get expert HVAC insurance quotes today! Get free quotes here. Our analysis shows potential savings of 20-50% on liability premiums through our network. Get competitive quotes tailored for your HVAC business.