HVAC · INDEPENDENT FRANCHISE
Temperature Pro
FRANCHISE
INSURANCE
Your Temperature Pro technician installed the system, confirmed it was running properly, and left the customer satisfied. You followed up two weeks later. The customer renewed their maintenance plan. For two years, everything worked.
Then August arrived. The heat index in your territory hit 108 degrees for six consecutive days. On day four, the system failed. The customer called — not to complain about the failure, but to tell you their elderly mother was in the hospital for heat-related illness. And to tell you their attorney was asking whether the system was installed correctly.
A heat-season equipment failure in a residential or commercial HVAC installation is the completed operations claim pattern that every HVAC franchise faces — and the one that most agents writing standard contractor general liability do not build the policy to handle. Understanding how that claim works, and whether your policy actually responds, is what this page covers.
JUMP TO SECTION
COMPLIANCE REQUIREMENTS
REQUIRED COVERAGE CHECKLIST
OPERATIONAL COVERAGE NEEDS
EXTREME HEAT FAILURE CLAIMS
GAS LINE LEAK EXPOSURE
PREMIUM CALCULATION
BEYOND MINIMUM COVERAGE
FAQs
$1,000,000 per occurrence
GL MINIMUM (BENCHMARK)
$1,000,000 combined single limit
AUTO MINIMUM
$1,000,000 each accident
WC EMPLOYERS LIABILITY
5537 (HVAC Install/Service)
PRIMARY NCCI CODE
$2,000,000 per occurrence / $2,000,000 aggregate
UMBRELLA (BENCHMARK)
ON THIS PAGE
COMPLIANCE REQUIREMENTS
REQUIRED COVERAGE CHECKLIST
OPERATIONAL COVERAGE NEEDS
EXTREME HEAT FAILURE CLAIMS
GAS LINE LEAK EXPOSURE
PREMIUM CALCULATION
BEYOND MINIMUM COVERAGE
FAQs
COMPLETE INSURANCE PROGRAM
SUBCONTRACTOR CERTIFICATE COMPLIANCE ACROSS YOUR FRANCHISE
Most home service franchisees use independent contractors or 1099 workers at some point. The coverage gap this creates is not obvious until a claim surfaces — and by then, the conversation is about who pays rather than what was preventable.
A lapsed subcontractor certificate is invisible until your carrier finds it. When they do, they invoke the subcontractor exclusion in your general liability policy. The work was done. The damage is real. The coverage is not there.
Rikor's subcontractor compliance monitoring tool tracks subcontractor certificates in real time. When a certificate lapses, you know before the next job starts — not after the claim comes in.
FRANCHISEE QUESTIONS
FREQUENTLY ASKED QUESTIONS
WHAT INSURANCE DOES A TEMPERATURE PRO HVAC FRANCHISE NEED TO OPEN?
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You need commercial general liability on an occurrence form, commercial auto, workers' compensation, and an umbrella policy. Your franchise agreement specifies required limits and the exact franchisor entity that must appear as additional insured. Confirm those requirements before binding any coverage.
DOES MY POLICY COVER FAULTY INSTALLATION THAT CAUSES THE UNIT TO FAIL IN EXTREME HEAT?
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Completed operations coverage on an occurrence-form general liability policy responds to property damage and bodily injury from installations that fail after the job is done. Coverage applies to the resulting damage — not to the cost of fixing or replacing your own work. The occurrence form is critical: it covers claims that arise from work done in prior policy periods.
WHAT HAPPENS IF A GAS LINE CONNECTION I MADE LEAKS AND CAUSES AN EXPLOSION?
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Gas is classified as a pollutant under standard general liability policy language. The pollution exclusion may trigger before the claim is evaluated on its merits. Contractors pollution liability removes that threshold question and responds to gas line failure claims directly. Adequate umbrella limits above the primary general liability are equally important for this exposure.
DOES REFRIGERANT FALL UNDER THE POLLUTION EXCLUSION IN MY GL?
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Typically yes. Refrigerant is classified as a pollutant in most standard general liability policy language. A refrigerant release causing bodily injury or property damage is likely excluded. Contractors pollution liability fills that gap.
WHAT IS THE NCCI WORKERS' COMPENSATION CODE FOR TEMPERATURE PRO HVAC TECHNICIANS?
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HVAC installation and service classifies under NCCI code 5537. Rates vary by state from approximately $2.24 to $5.14 per $100 of payroll. Gas line work may trigger a separate classification in some states — confirm with your carrier at inception.
DOES MY FRANCHISE INSURANCE COVER SUBCONTRACTORS OR 1099 WORKERS?
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Only if the subcontractor exclusion has been modified to require current certificates. There are two separate risks: the financial audit exposure and the potential direct injury liability if a 1099 worker without their own workers' compensation coverage is hurt on your job. Both disappear with a current certificate in hand before the job starts.
WHO NEEDS TO BE LISTED AS ADDITIONAL INSURED ON MY TEMPERATURE PRO POLICY?
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Your franchise agreement specifies the franchisor's exact legal entity name. That name must appear as additional insured on your general liability and commercial auto policies. Confirm the exact entity from your franchise agreement — and ensure the endorsement covers both ongoing and completed operations.
WHAT DOES COMPLETED OPERATIONS COVERAGE MEAN FOR AN HVAC FRANCHISE?
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Completed operations coverage responds when a claim arises from work you performed after the job is done. For HVAC, that means an installation or service performed months or years ago that produces a claim today — a heat season failure, a refrigerant leak, a gas connection fault. The occurrence form is the policy type that covers these events without a retroactive date limitation.
HOW DOES ADDING COMMERCIAL ACCOUNTS CHANGE MY COVERAGE NEEDS?
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Commercial accounts commonly require $2,000,000 per occurrence — higher than the benchmark minimum of $1,000,000. They may require additional insured endorsements for property managers or building owners. Confirm your limits and endorsements match each commercial account's COI request before you take the job.
CAN I USE A PERSONAL AUTO POLICY FOR MY TEMPERATURE PRO SERVICE VAN?
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No. A vehicle used primarily for business operations must be insured under a commercial auto policy. Personal auto policies exclude commercial use. Confirm your commercial auto policy covers all vehicles used for Temperature Pro operations — including personal vehicles driven by technicians for work purposes.
WHAT IS PRIMARY AND NON-CONTRIBUTORY LANGUAGE ON AN HVAC FRANCHISE POLICY?
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Primary and non-contributory means your general liability policy responds first when a claim involves your franchisor — before any policy the franchisor carries contributes to the loss. Confirm this language is on your declarations page before issuing a certificate of insurance to your franchisor.
What a complete Temperature Pro franchise insurance program looks like
Six things that define a program built for the actual risk.
The occurrence form on your general liability policy is the difference between a two-year-old installation claim being covered and being denied because the policy period has passed. Confirm the form type on your declarations page before next renewal.
The completed operations additional insured endorsement (CG 20 37) is what protects your franchisor — and you — for claims that arise after the job is done. The ongoing operations endorsement alone does not cover post-job claims. Confirm both forms are on the policy.
Gas line work without contractors pollution liability leaves your most serious completed operations exposure excluded from coverage. The standard general liability pollution exclusion applies to gas. The contractors pollution liability policy removes that exclusion.
Your 1099 subcontractors carry two separate risks: the audit adjustment at year end, and the direct injury liability if a sub without their own workers' compensation is hurt on your job. Collect current certificates before every job. Both risks disappear when you do.
Commercial accounts require limits above the franchise agreement minimum in most markets. The policy that satisfies your franchisor may not satisfy the property manager who can grow your revenue. Build the limits for the accounts you are winning.
Contractors errors and omissions covers the professional judgment component of installation and maintenance claims — the territory general liability does not reach. For any HVAC franchise doing design-and-install or maintenance agreement work, this is the coverage that closes the gap between a general liability claim and a professional negligence allegation.
SUBCONTRACTOR RISK
A LAPSED SUB CERTIFICATE IS INVISIBLE UNTIL YOUR CARRIER FINDS IT
Most home service franchisees use independent contractors or 1099 workers at some point. The coverage gap this creates is not obvious until a claim surfaces. When a certificate lapses, your carrier invokes the subcontractor exclusion in your general liability policy. The work was done. The damage is real. The coverage is not there.
Rikor's subcontractor compliance monitoring tool tracks subcontractor certificates in real time. When a certificate lapses, you know before the next job starts — not after the claim comes in.
WADE MILLWARD, CIC
Founder & CEO · Rikor Insurance
Wade Millward has spent 18 years specializing in franchise insurance. He holds the Certified Insurance Counselor (CIC) designation and has reviewed hundreds of franchise disclosure documents across home service, food service, and commercial franchise verticals. He has built coverage programs for Authority Brands franchisees across electrical, HVAC, plumbing, and restoration trades.