HVAC Contractor Insurance

Factors that affect HVAC insurance costs

The cost of an HVAC insurance policy varies between contractors and HVAC business owners. This is because insurance providers take into account several types of factors, including the size of your business, where it's located, the kind of projects you take on, and even your past claims history. Here’s how these factors typically drive your costs up or down:

Size and structure of your business

An independent contractor working mostly in residential homes carries less overall risk (and usually pays less) than a company with 15 employees handling large‑scale commercial jobs.

The type of projects you take on

The bigger and more complex the job, the more there is at stake. Installing rooftop chillers on a 20‑storey office tower carries more risk than replacing a furnace in a bungalow. Industrial refrigeration work also tends to have higher premiums due to safety and equipment costs. Plus, if you work on municipal or large commercial projects, you might need higher liability limits or specific endorsements to qualify for contracts, and that can increase your premiums, too.

The value of your tools, equipment, and vehicles

If you own expensive diagnostic equipment, recovery machines, and multiple service vans, your replacement cost and coverage needs will be higher. Insurers base part of your premium rate on what it would cost to replace your gear.

Where you operate your business

Working in urban centres can mean higher premiums because of theft, accident, and property damage rates. Rural contractors may see lower rates, unless they regularly travel to high‑risk areas or remote job sites where emergency access is limited.

Your years of experience and safety record

A seasoned contractor with a clean claims history is generally seen as a lower risk than a new business with no track record. Also, if you’ve invested in safety training, make sure to mention it, as some insurance companies reward proactive safety measures.

Your claims history

Frequent claims signal higher risk to insurance companies, which often leads to higher insurance rates. Even small claims can add up. Sometimes it’s worth paying for minor losses out‑of‑pocket to keep your record clean.

The types and level of coverage you choose

Choosing higher coverage limits or adding optional protections like pollution liability or cyber insurance will increase your premium, but it can save you far more if a serious claim happens. Likewise, choosing lower deductibles means the insurance company must cover more in a claim, which can also increase costs.