If you don’t have handyman insurance, you should obtain at least a general liability insurance policy to cover your fees if a client sues you.
General handyman services may seem trivial to you, with low risk involved, but insurance also offers you protection. If you’re working at a client’s home and are injured, your insurance will cover your medical bills and losses.
And you won’t have to ruin your reputation by filing a lawsuit against a client.
Let’s dig deeper into the requirements for insurance coverage as a handyman with the question we hear most often…
Do You Really Need Handyman Insurance?
Handymen don’t need insurance as a requirement if they’re not licensed. But if you’re running a business and licensed, chances are, your state requires that you have insurance.
While a lot of people offer general handyman services part-time as a side hustle, and may never have an issue on a job site, but there’s always a risk that you will.
When first starting out, a lot of people take the risk of not having insurance for the first few months because they’re just building up their business. When you’re making a few hundred dollars a month, insurance can cut into your profits. But don’t be short sighted and risk your future by skipping out of a reliable policy.
In the past, customers would often not ask if you’re insured and just be happy you can help. But with more and more online reviews for local businesses, you would be surprising how many customers will Google your trade name before calling.
So if you are taking this career path seriously, or if you’re making enough money to cover the cost of insurance, it’s a good way to reduce your risk as a business owner.
A few questions to ask yourself that will help you better understand if you need handyman insurance are:
Does your state require professionals offering home repair to have insurance?
Do you plan on working with commercial entities, such as apartment complexes?
Do you have or plan to obtain a contractor’s license?
Are you going to offer plumbing or electrical work?
General handyman service providers must know the different types of handyman insurance that’s available to them. You can generally pick and choose what type of insurance is best for you, but a general liability policy is a minimum must-have in many cases.
The types of insurance (we’ll be covering costs in the next section) that you’ll want to consider are:
Handyman Liability Insurance
If you’re just starting your business, the most basic form of insurance that you’ll need is a general liability policy, also known as handyman liability insurance. These policies are there to cover you from:
Property damage claims
Handymen and their employees are covered under the scope of a general liability policy. Since anything can happen on a job site, liability insurance makes a lot of sense. The policy will cover the repair or replacement of property.
If you’re on a job site, a ladder falls and breaks through a glass table or causes damage to a wall, the insurance policy will cover these costs. Accidental damage can occur on a customer’s property at any time, and a general liability insurance policy ensures that you don’t have to pay out-of-pocket for these expenses.
Commercial Auto Insurance
Handymen need to haul materials to a job site and carry their tools, too. Commercial auto insurance is a must-have if you have a company-owned vehicle. Cars, trucks, vans – any vehicle owned or used in the course of business – should be added to a commercial policy.
Your personal insurance will not provide the level of protection required for a commercial vehicle.
Commercial vehicles are a “higher risk” since you’re on the road often, too. You can mix and match coverage options on a commercial auto policy, including adding:
Uninsured motorist coverage
You can also take out a policy that includes options that cover all autos that you use in the course of business. For example, if your commercial vehicle broke down and you needed to use your own personal vehicle for a day, the vehicle would be covered if you had “any auto” coverage.
Contractor’s Tool and Equipment Insurance
As a handyman, you know that your tools are your livelihood. You spend a lot of money acquiring and maintaining your tools, and tool and equipment insurance is a safeguard against the following:
Loss of tools
Tools that are damaged
You’ll be moving from one site to another as part of your job. This insurance will cover your loss if you have an expensive power saw (or some other tool) stolen from a job site. These policies will cover most of the tools that you’ll be using, such as small tools, equipment that is mobile and any items under five years old.
If you have older tools that are damaged in a flood or from some other source, the policy may not cover them if they’re old or worn.
You’ll want to assess whether filing a claim against your insurance is worthwhile with tools and equipment. If your tools costs only $20 to replace, it’s often best to pay out of pocket to replace the item rather than go through your insurance policy.
Business Owner’s Policy
A business owner’s policy, or BOP, is an optional insurance policy that is best described as an extension of your general liability or handyman’s insurance policy. The policy will cover two main areas:
Liability. General liability coverage is offered, including coverage for property damage or customer injury.
Property. If you own property that is considered “business property,” such as a commercial building or some form of movable property, a BOP will cover these items.
BOP policies do have certain exclusions, which you should consider to maximize your insurance protection. If, for example, an earthquake caused your commercial structure to collapse, you’ll likely need an endorsement on your policy to cover the incident.
Endorsement policy options are available through most insurers. If you live in areas that have high risks of tornadoes, earthquakes, floods or hurricanes, endorsements can cover these instances for an additional cost.
Since liability and property insurance are covered by BOP insurance, it’s a great option for small- and medium-sized businesses to combine these forms of insurance.
Do you have employees working for you? If so, workers’ compensation offers coverage if your workers are injured while on the job. For example, let’s say that Jim, your employee, fell off a ladder while on-the-job.
Workers’ compensation would help cover Jim’s:
You’ll limit your business’ risk while also offering your part- and full-time employees some peace of mind that if they’re injured at work, that they can recover without significant financial ramifications.
Workers’ compensation may be required in your state (check NFIB for your state’s requirements).
Every policy that you obtain will have limits that will dictate the overall price of the policy. Higher limits put the insurer at a higher risk, so you’ll be required to pay more. You may be able to bundle policies under one insurer to save money on your policies.
As your business grows, you’re likely to need more insurance and higher limits to offer the best protection for your business.
How Much Does Handyman Insurance Cost?
Whether you’re just getting started as a handyman or have been in business for years, your biggest concern about insurance will be cost. You have a budget, and if you’re in the early days of your business, cash flow may be a concern.
But insurance should be treated as a non-negotiable cost. So, how much can you expect to spend on your premiums?
The cost of your insurance will depend on a number of factors, including:
Your policy limits
The value of your equipment
While it’s impossible to know exactly how much you’ll pay (without a quote and knowing more about your business), here are some ballpark figures for premiums:
The median cost of general liability insurance for handymen is $800 per year for a policy with a $1 million limit and $500 deductible.
Contractor’s Tool and Equipment Coverage
Handymen pay a median price of $170 per year for tool and equipment coverage with a $5,000 policy limit.
If you’re using a dedicated vehicle for your handyman business, then you’ll need a commercial auto insurance policy. Costs can vary greatly depending on your location, vehicle type and other factors.
However, the median cost of commercial auto coverage is about $1,800 per year with a policy limit of $550,000.
If you have employees, you will likely need to purchase workers’ compensation insurance. Again, costs can vary greatly for this coverage, but the median cost is $3,700 per year.
If you were to add up the costs of each type of insurance, you can expect to pay a median cost of $6,470 per year for your insurance. Keep in mind that there may be other types of coverage that you need that is not covered in this section.
What’s the Cost of Not Having Insurance?
Spending thousands of dollars per year on insurance may seem like a steep price to pay, especially if you’re just getting started with your business. But the cost of not having insurance may be greater than the cost of your insurance.
Even the most experienced and skilled handymen can have accidents and unexpected things can happen anytime. If you have employees, the risk of accidents, injuries and uncertainties is even higher.
Insurance provides financial protection. If you don’t have insurance and things go wrong, your business will have to cover the cost.
If a customer’s property is damaged or someone is injured, your liability insurance will cover these costs. Without this coverage, you will have to pay for damages and costs related to injuries out of your own pocket.
Depending on the extent of the damage or injury, these costs could bankrupt your business. Legal fees alone can far exceed the cost of your annual premiums.
The risk of not having insurance far outweighs the cost of paying insurance premiums each year.
Get a Handyman Insurance Quote Online
It’s important to remember that the median costs listed above are just estimates. The cost of your coverage will depend on a number of factors that are unique to you and your business.
The best way to estimate your handyman insurance costs is to compare quotes from different insurance providers. Comparing quotes will help you find the best policies at the best prices and help ensure that there are no gaps in your coverage.
CommercialInsurance.net can save you time by providing you with quotes for your handyman insurance policies in one central location. Compare quotes from leading insurance providers and find the best option for your handyman business.