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. Our proprietary quote platform connects you directly to contractor-friendly insurers who understand HVAC risks, delivering instant quotes customized to your exact needs – from installation floaters to faulty workmanship protection. Our tech-enabled specialized agents provide expert guidance throughout the process, ensuring you get the right coverage for your specific operations.
We’ve analyzed over 1,100 HVAC contractor insurance quotes from leading carriers across all 50 states to provide transparency on what you need and current market quotes. Our HVAC insurance specialists and trades-specific technology compress weeks of shopping into minutes – get quotes online, compare options, and buy coverage instantly.
This comprehensive guide will walk you through everything HVAC contractors need to know about insurance, including:
- Essential coverage types for sole proprietors, small businesses, and established contractors
- HVAC-specific class codes including 95647 (no LPG equipment) and 95648 (all categories)
- General liability quotes based on our analysis of 1,100+ quotes, showing typical premiums range from 1.3% to 2.6% of annual revenue
- Workers’ compensation quotes using class code 5537, with rates typically $2.24 to $5.14 per $100 of payroll
- State-by-state quote variations across all 50 states
- Additional coverage options including tools & equipment, E&O, commercial auto, and bonds
- Real quote data for businesses at $150K, $500K, and $1M revenue levels
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:
For Sole Proprietors
Essential Coverage
- HVAC Liability Insurance (General Liability) – Your foundation coverage that protects against property damage and bodily injury claims. Most clients require proof of insurance before hiring.
- Products & Completed Operations – Usually included in your liability policy, this protects you from claims after job completion (like water damage from AC installations).
Recommended Additional Coverage
- Tools and Equipment Coverage (Inland Marine) – Protects your valuable tools from theft or damage
- Contractors Equipment Floater – Affordable protection for specialized HVAC equipment during transport and installation
- Contractor’s Errors & Omissions – Covers claims of faulty workmanship, materials, or products
- Commercial Auto – Required if you use a work vehicle
For Small HVAC Businesses (2-3 Employees)
All the above coverages, plus:
- Workers Compensation – Required when you have employees (not needed for subcontractors)
- Commercial Property – Important if you own or rent workspace, storage, or offices
- Umbrella Insurance – Consider this as revenue and project volume increase
For Established Contractors (5+ Employees)
All previous coverages, plus:
- Employment Practices Liability (EPLI) – Protects against employee-related lawsuits
The coverage you need grows with your business. Start with the essentials and add protection as you expand.
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 Quotes Study
We crunched the numbers with over 1,100 HVAC liability insurance quotes from leading carriers for HVAC businesses across all 50 states. This comprehensive data represents quotes from major insurance providers for HVAC contractors operating across various specialties and service areas. The following breakdown reflects typical general liability premiums based on these key business profiles:
- $150K Revenue: Solo HVAC technician or small operation with minimal subcontracting (under 10%), established for 2+ years with clean claims history
- $500K Revenue: Owner plus 2-3 technicians, approximately 10% subcontracted work, established business with proven safety record
- $1M Revenue: Owner with 5+ employees, roughly 10% subcontracted work, established HVAC company with comprehensive safety protocols
The cost of HVAC liability insurance typically ranges from 1.3% to 2.6% of annual gross revenue, reflecting the specialized risks in heating, ventilation, and air conditioning work. Our research shows that HVAC contractors who actively compare quotes can reduce their premiums by 38% to 73% below market averages, delivering significant operational savings.
Small HVAC operations earning $150,000 annually face average premiums of $3,140, though competitive shopping can reduce this to $860—an impressive 73% reduction. As HVAC businesses expand their service capabilities and revenue, insurance costs scale accordingly, with mid-tier operations at $500,000 revenue averaging $9,390 in annual premiums. Established HVAC companies generating $1 million in revenue typically pay around $18,760 for general liability coverage, though favorable rates can lower this to $10,760.
| Revenue Level | National Average | Favorable Rate | Potential Savings | Low % of Revenue | High % of Revenue |
| $150,000 | $3,140 | $860 | 73% | 1.5% | 2.5% |
| $500,000 | $9,390 | $5,810 | 38% | 1.4% | 2.3% |
| $1,000,000 | $18,760 | $10,760 | 43% | 1.3% | 2.6% |
State-by-State Quotes
Insurance premiums for HVAC contractors vary significantly by state due to local regulations, climate patterns, and market dynamics. Our detailed HVAC insurance cost analysis covers all 50 states, helping you benchmark rates and identify savings opportunities specific to your location. Whether you’re in a high-cost or affordable market, this breakdown reveals the factors driving insurance costs in your area.
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.
If you’d like to learn more 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)
Protects tools and equipment during transit and at job sites. Annual premiums: $200-$2,000. Policy limits: $5,000-$15,000+ with per-item limits typically $5,000.
Contractors’ E&O Insurance
Covers claims of faulty work, wrong installations, or negligence. Annual premiums: $50-$500. Policy limits: $10,000-$1M+.
Commercial Auto Insurance
Essential for work vehicles—personal auto policies don’t cover business use. Annual premiums: $1,500-$3,050 per vehicle. Standard limits: $100K/$300K/$100K, though $500K-$1M recommended.
Bonds for HVAC Contractors
Required for licensing in many states. Bond amounts: $5,000-$25,000. Premiums: 1-3% of bond amount based on credit:
| Bond Amount | Excellent Credit | Good Credit | Bad Credit |
| $10,000 | $100-$300 | $300-$500 | $500-$1,000 |
| $25,000 | $200-$500 | $500-$1,200 | $1,200-$2,500 |
State requirements vary—California requires $25,000, Texas has no mandate.
Commercial Property Insurance
Protects buildings and contents against damage. Essential for shops and warehouses. Annual premiums: $1,000-$5,000 based on property value and location.
Business Owner’s Policy (BOP)
Bundles general liability and property coverage. Lower cost than separate policies but less flexible. Ideal for businesses with physical locations.
Commercial Umbrella Insurance
Adds $1M+ extra liability coverage beyond primary policies. Annual premiums: $500-$1,000.
Employment Practices Liability Insurance
Protects against employee discrimination and wrongful termination claims. Annual premiums: $1,000-$5,000. Limits: $100K-$1M.
Cyber Liability Insurance
Covers data breaches and cyberattacks. Annual premiums: $300-$1,000. Limits: $100K-$1M.
Why Insure Your HVAC Business with ContractorNerd?
Ready to discover if you’re overpaying for HVAC contractor insurance? ContractorNerd’s digital platform instantly shows you competitive rates from carriers who understand HVAC risks. No pushy sales calls, no lengthy applications, no waiting days for quotes. Just clear, competitive pricing from insurers specializing in HVAC businesses, empowering you to secure optimal coverage fast.
Why HVAC contractors choose ContractorNerd:
✓ All Your HVAC Coverage, One Platform – General liability, workers’ comp, commercial auto, installation floaters, refrigerant liability, and faulty workmanship coverage – manage everything through one efficient system. Stop coordinating between multiple agents and carriers.
✓ Instant Proof of Insurance – Land commercial contracts faster with immediate digital COI generation. When building managers or GCs need insurance verification, deliver it instantly from your mobile device. No waiting, no missed deadlines, no lost projects.
✓ Maximize Profits, Minimize Downtime – While competitors struggle with insurance paperwork, you’re already submitting bids and scheduling installations. Our analysis reveals HVAC contractors can reduce premiums by 38-73%—reinvest those savings into equipment upgrades and business expansion.
Get your customized quotes today.
HVAC Insurance FAQs
How much is insurance for a HVAC company?
Insurance runs 1.3% to 2.6% of your annual revenue for general liability alone. A $500K HVAC business typically pays $9,390 yearly, though shopping around can cut that to $5,810. Add workers comp at $2.24-$5.14 per $100 of payroll, and you’re looking at real money – but way cheaper than one lawsuit.
What is general liability insurance for HVAC business?
It’s your basic protection when you damage a client’s property or someone gets hurt on your job. Covers things like water damage from botched AC installs, or when your ladder takes out a chandelier. Standard limits are $1M per occurrence, $2M aggregate. Most clients won’t let you work without it.
What is the general liability code for HVAC?
HVAC contractors use class code 95647 if you don’t install LPG equipment, or 95648 if you work on everything including propane systems. The code tells insurers what kind of HVAC work you do, which affects your rates. Most residential guys are 95647, commercial contractors often need 95648.
How much is HVAC liability insurance?
For a solo tech making $150K, expect around $3,140 annually, though good rates drop that to $860. Mid-size shops at $500K revenue average $9,390, while million-dollar operations pay about $18,760. That’s roughly 1.3%-2.6% of revenue. State matters too – New York’s brutal, while states like Idaho are way cheaper.
Do HVAC contractors need professional liability?
Yeah, it’s worth grabbing E&O coverage for $50-500 annually. Protects you from “faulty workmanship” claims when systems fail after installation – wrong sizing, bad refrigerant work, whatever. Not legally required like general liability, but one mis-sized unit cooking someone’s server room and you’ll wish you had it.