The policies an HVAC business carries
HVAC work mixes electricity, gas, refrigerant and ladders in attics. A furnace that is not set up right or a condensate line that overflows into a ceiling are the kinds of claims an HVAC shop plans for.
| Policy | Average a month |
|---|---|
| General liability | $101 |
| Tools and equipment | $41 |
| Commercial auto | $286 |
| Workers' compensation | $182 |
| Surety or license bond | $9 |
| Commercial umbrella | $81 |
Averages are what Insureon's customers who are HVAC installers pay, from Insureon's cost page; most of its customers have fewer than five employees. Across all its small business customers, general liability runs $265 to $3,030 a year.
Claims HVAC companies plan for
- A condensate line backs up and stains a ceiling
- A furnace you serviced is blamed for carbon monoxide symptoms
- A tech steps through an attic ceiling
- A condenser falls off a pad during a swap
Ask your agent, in these words:
- Would my policy pay if a condensate line backs up and stains a ceiling?
- Would my policy pay if a furnace you serviced is blamed for carbon monoxide symptoms?
- Would my policy pay if a tech steps through an attic ceiling?
- Would my policy pay if a condenser falls off a pad during a swap?
Name the work you sell
A policy covers the work you describe on the application. From the HVAC services list, name each of these and ask whether any is excluded: central ac, 3 ton, installed; heat pump, 3 ton, installed; gas furnace, installed; electric furnace, installed; diagnostic visit; ac tune-up; furnace tune-up; capacitor or contactor replacement; refrigerant leak search and repair; air duct cleaning; dryer vent cleaning, ground floor; thermostat install; maintenance plan.
Gauges, recovery machines and vacuum pumps are expensive and easy to steal from a truck. On the tools list, the items to list on the policy are brazing torch kit with nitrogen regulator; combustion analyzer; press tool for copper refrigerant fittings; infrared thermometer or camera; flaring and swaging kit; condenser dolly and lifting straps, and from the starter kit, digital refrigerant gauges with temperature clamps; hvac multimeter with microamps; hvac clamp meter; vacuum pump and micron gauge; refrigerant recovery machine and recovery tank.
State rules in the license
These are the insurance and bond lines in each state's HVAC license rules, from our HVAC license guide, which reads each state board's own pages. 36 of the 45 states we cover set an insurance or bond rule in the license itself. Click a state for the full license steps.
| State | Insurance in the license rules | Bond |
|---|---|---|
| Alabama | Not set in the license rules we checked | A $20,000 performance bond naming the board is required for active status. |
| Alaska | Public liability and property damage insurance of at least $20,000 property damage, $50,000 injury to one person and $100,000 injury to more than one person, plus workers' comp as required by state law. | $10,000 surety bond for a mechanical contractor. |
| Arizona | You must attest that you follow the state workers' compensation rules, and at renewal licensees with employees give their workers' comp policy number and insurer. Check with the board for liability insurance. | Residential specialty: $4,250 if yearly volume is under $375,000, or $7,500 at $375,000 or more. Commercial specialty: $2,500 up to $50,000 based on yearly volume. A dual license combines both amounts. |
| Arkansas | The board may set a minimum general liability insurance level by rule for license classes. Check with the board for the amount. | Not set in the license rules we checked |
| California | Workers' comp is required. C-20 contractors cannot claim the workers' comp exemption, even with no employees. | $25,000 contractor bond. |
| District of Columbia | Not set in the license rules we checked | $5,000 refrigeration and air conditioning bond for a contractor or designated master. |
| Florida | General liability of at least $100,000 public liability and $25,000 property damage, plus workers compensation or an exemption. | Not set in the license rules we checked |
| Hawaii | General liability of at least $100,000 bodily injury per person, $300,000 per occurrence, and $50,000 property damage. Workers compensation if you have employees. | Only if the board requires one for your license. |
| Idaho | Not set in the license rules we checked | $2,000 compliance bond for HVAC contractors and specialty contractors, kept in force for the whole license period. |
| Illinois | Set by each city. | Set by each city. |
| Iowa | Contractor needs public liability insurance of at least $500,000 from an insurer licensed in Iowa. Workers' compensation proof if you have one or more employees. | $5,000 surety bond for the contractor license. |
| Kansas | Set by each city or county. | Set by each city or county. |
| Kentucky | General liability of at least $500,000 and property damage of at least $300,000, from a carrier approved in Kentucky. Proof is due before the license issues or renews. The state policy covers you for local licensing too. | Not set in the license rules we checked |
| Louisiana | Commercial applicants do not submit proof of insurance. Residential and home improvement applicants must show at least $100,000 general liability and workers comp. | Not set in the license rules we checked |
| Maryland | Masters, master restricted and limited license holders must carry at least $300,000 general liability and $100,000 property damage insurance, and send proof to the board. | If a county or town requires an HVACR surety bond, proof of the state required insurance can satisfy it. |
| Minnesota | Not set in the license rules we checked | $25,000 mechanical contractor surety bond filed with DLI. |
| Mississippi | Proof of general liability insurance is required for every license and renewal. There is no minimum for residential licenses. Commercial licenses need at least $300,000 per occurrence or $600,000 aggregate. Send proof of workers comp if you have 5 or more employees. MSBOC must be listed on the policy for cancellation notice. | Not set in the license rules we checked |
| Montana | The license application must include proof that you comply with Montana workers comp laws. | Not set in the license rules we checked |
| Nebraska | Contractors with one or more employees must file a current workers comp certificate of insurance (ACORD 25) naming the Department of Labor as certificate holder. A contractor not required to carry workers comp signs a statement saying so. | Not set in the license rules we checked |
| Nevada | Proof of workers comp coverage is required to get, keep and renew a license, unless you are exempt and sign an exemption affidavit. | A license bond set by the board at approval, from $1,000 to $500,000, based on license type, monetary limit, finances, experience and character. |
| New Jersey | General liability insurance of at least $500,000 per occurrence for combined bodily injury and property damage. | A $3,000 surety bond, renewed each year. |
| New Mexico | Workers compensation insurance is required of all licensees. A sole owner with no employees may be exempt. | A $10,000 code compliance bond from a surety authorized in New Mexico, covering the full license period. |
| North Dakota | A certificate of liability insurance naming the Secretary of State as certificate holder, plus proof of workers compensation coverage from Workforce Safety and Insurance (or a letter of good standing if you have no ND employees). | No state contractor bond. The bond section of the contractor law was repealed in 1995. |
| Ohio | Contractor liability insurance in your name, including completed operations, of at least $500,000. | Not set in the license rules we checked |
| Oklahoma | Active contractors need general liability insurance of at least $50,000, with the CIB listed as certificate holder. | $5,000 corporate surety bond payable to the Construction Industries Board, kept on file before the contractor license is issued. |
| Oregon | General liability depends on endorsement: residential specialty $300,000 per occurrence, residential general $500,000 per occurrence, commercial specialty Level 2 $500,000 per occurrence, Level 1 $1 million aggregate. Workers comp if you have non exempt employees. | Residential specialty $20,000. Residential general $25,000. Commercial specialty Level 2 $25,000, Level 1 $55,000. |
| Pennsylvania | For home improvement registration: general liability with at least $50,000 personal injury and $50,000 property damage coverage. | Not set in the license rules we checked |
| Rhode Island | Licensed mechanical trade businesses must keep the liability insurance set by R.I. Gen. Laws 5-65-7, at least $500,000 combined single limit, plus workers comp as state law requires. | Not set in the license rules we checked |
| South Carolina | Not set in the license rules we checked | Residential: $10,000 surety bond if you take jobs over $5,000 in labor and materials. Commercial: net worth proof or a surety bond by group, from $7,000 (Group 1) to $300,000 (Group 5). |
| Tennessee | General liability and workers comp (or a valid exemption) are required. Minimum general liability is $100,000 for a monetary limit up to $500,000, $500,000 for a limit of $500,001 to $1,500,000, and $1,000,000 above that. | You show financial strength with a CPA reviewed or audited financial statement less than 12 months old. Starting July 1, 2026 you can instead post a contractor surety bond of at least 50% of the monetary limit you ask for. |
| Texas | Class A: $300,000 per occurrence and $600,000 aggregate for property damage and bodily injury, plus $300,000 aggregate products and completed operations. Class B: $100,000 per occurrence, $200,000 aggregate and $100,000 products and completed operations. | Not set in the license rules we checked |
| Utah | General liability of at least $1,000,000 per occurrence and $2,000,000 aggregate, with DOPL as certificate holder. Workers comp, or a waiver from the Utah Labor Commission if you have no employees. | Not set in the license rules we checked |
| Vermont | For residential contractor registration, $1,000,000 per occurrence and $2,000,000 aggregate liability coverage. | Not set in the license rules we checked |
| Virginia | Not set in the license rules we checked | Class A needs $45,000 net worth and Class B needs $15,000, or either can post a $50,000 surety bond instead. |
| Washington | General liability of $200,000 public liability and $50,000 property damage, or $250,000 combined single limit, for contractor registration. | $15,000 surety bond for a specialty contractor registration. |
| West Virginia | For the contractor license: workers' compensation and unemployment coverage for all employees working in West Virginia. | A wage bond status affidavit with the contractor license application. |
States not listed either leave insurance to cities and counties or set no rule in the license. Your city, your customers and your contracts can still ask for more.
Workers' comp and bonds
The SBA says every business with employees must carry workers' compensation, unemployment and disability insurance. Insureon's average for HVAC installers is $182 a month, priced per $100 of payroll. A bond protects the state or the customer, not you; Insureon puts its yearly cost at a share of the bond amount:
| Bond amount | Estimated yearly cost |
|---|---|
| $5,000 | $25 to $500 |
| $10,000 | $50 to $1,000 |
| $50,000 | $250 to $5,000 |
Certificates of insurance
Builders, commercial property managers and some homeowners ask for a certificate before an install. Keep a PDF on your phone so you can send it the day they ask.
Sources
- Insureon: Insurance cost for HVAC installers, checked October 9, 2026
- Insureon: General liability insurance cost, checked October 9, 2026
- Insureon: Workers' compensation insurance cost, checked October 9, 2026
- Insureon: Surety bond cost, checked October 9, 2026
- SBA: Get business insurance, checked October 9, 2026
- Koira: HVAC license requirements by state (each row lists its board sources), checked October 9, 2026
Last checked October 9, 2026. This page is general information, not legal or tax advice. Rules change and differ by state and city, so confirm with the agency named before you act.