Do handymen need business insurance?
Yes. As a tradesman who is usually skilled at multiple types of maintenance work, such as repairs, electrical, and plumbing work, having the right insurance is important. Handyman work involves a certain amount of risk to both your business and your physical well-being.
A handyman is the ultimate jack-of-all-trades. And with that comes a lot of different types of risks. Liability insurance will protect you from many of the things that can go wrong when you run a business.
In order to ensure your business continues to run smoothly, you need to consider business insurance.
Reasons you might need insurance:
- Your state requires you to have insurance.
- You want to bid on jobs for bigger clients, like apartment complexes.
- You are applying for a contractor’s license.
- You also provide plumbing and electrical services.
Proper business and liability insurance will protect you and your assets from unforeseen circumstances like lawsuits, property damage, and injuries.
Types of handyman insurance
Handymen and handywomen can benefit from several types of insurance policies. Two major coverages that we recommend are workers’ compensation insurance and general liability insurance, but you’ll also need other insurance policies depending on things like the number of people who work for you and the types of things you need to protect.
As someone who is in charge of a wide range of maintenance and repairs, you should consider workers’ comp. Because of the physical nature of your work, your risk of getting injured is relatively high. That makes workers’ compensation an important policy to have – for yourself, and anyone who works for you. You will be able to rest easy knowing that you’re protected in the event that you or an employee (if you have any) get injured.
Most states require anyone with an employee to have workers’ compensation insurance. While workers’ comp isn’t always a state requirement to have for yourself, many employers ask handymen to have their own policy before doing work.
Workers’ compensation insurance protects you and your employees from injuries or illnesses resulting from work-related duties.
- Reimbursement for lost wages
- Return to work and recovery services
- Medical costs incurred due to getting hurt or sick on the job
- Employers liability coverage, should an employee file a lawsuit
We offer low-cost workers’ compensation.
We offer a minimum premium workers’ comp policy, which is inexpensive. We also have affordable solutions for one-person LLCs.
If you have employees, your workers’ comp rate will be a bit higher. Still, we work with the top national workers’ compensation carriers, and they specialize in working with handymen. So, we can guarantee you’re getting a good deal.
General Liability Insurance
General liability insurance is a versatile policy that will cover the various risks involved with being a handyman.
Because you do so much work at your customers’ homes, general liability insurance is an important policy to have. It gives you coverage for things like property damage, customer injuries, and lawsuits that may arise as a result of your operations. It can also help pay your legal costs, like lawyer’s fees and settlements.
- Property damage: If you stain some shelving, but also end up staining a client’s Persian rug in the process.
- Bodily injury: A client’s child breaks their wrist after running through your work area and tripping over your tool box.
- Personal/advertising injury: If you then tweet about how awful your client’s kids are, and how terrible the parents are, and your client claims libel.
- Legal fees, should your client decide to sue.
Contractor Package Policies
Contractor packages, or business owner’s policies, are a great place to start when it comes to minimizing your risk. You can combine coverages like general liability and property insurance into one policy (typically) at a reduced price. If you’re looking for a little more protection, while still being affordable, it’s easy to tack on several endorsements, or riders, to your package.
Popular package endorsements for a handyman:
- Contractor’s equipment policy: Working on a remodeling project without your tools isn’t easy. This endorsement will help you repair or replace your tools and equipment.
- Business income and extra expense: Let’s say your workshop is connected to a row of mixed-use properties. The space next door catches fire, and your workshop is damaged. If you need to relocate while the building is under repair, this rider will cover your loss of income. Meaning, if you have to take time off from work, or are delayed on your projects, this add-on will supplement your income. Additionally, extra expenses that were incurred due to the event (like moving costs or the rental fees of a new space) will be covered.
- Money and securities: People pay you to provide your skills and expertise to complete projects. Oftentimes, you’re accepting cash. If your earnings are stolen, regardless of it being on your business premises or not, this endorsement will reimburse your loss (up to the covered amount stated in your policy).
- Products and completed operations: No matter how talented you are at repair work, errors and mistakes can still happen. This is a good coverage to look into to make sure you’re protected.
The purpose of an endorsement is to add additional coverage to an existing insurance policy. Because you are gaining extra protection with an endorsement, the price of your policy will also increase.
The costs of these add-ons vary by insurance provider. Some companies offer a flat rate, while others charge a percentage of the basic contractor package’s rate itself. (this doesn’t make sense how it’s worded)
Business Property Insurance
Business property is another policy to consider. Your line of work relies on your tools and equipment, which can really add up to a hefty investment over time.
This policy protects your gear from fire, theft, vandalism, and natural disasters. If you can’t perform your work due to damages at your office, business property insurance will also cover loss of income.
Note: If you keep your tools at home, do not rely solely on your homeowner’s policy. Let’s say you work out of your garage, or a shed in your backyard. Many handymen don’t know this, but if you stow your tools at home and something happens to them, your homeowner’s policy usually only covers up to $500 in commercial property damages. That’s why the best way to protect your tools and equipment is to have commercial property insurance.
What other coverages should I consider?
- Business auto: Get a business auto policy if you need coverage for a vehicle your business owns. Handymen typically have a vehicle they use for business purposes, which makes business auto insurance necessary. If you somehow get into an accident while driving supplies to a customer’s house to make repairs, you’ll be glad you’re covered.
- Hired & non-owned auto: This type of insurance protects your company against vehicles you borrow, rent, or hire on behalf of your business. It also extends to non-owned vehicles, like if your employee uses their personal vehicle for work-related purposes and an accident occurs.
- Inland marine: If you take your work gear with you (more than 500 feet away from your business premises), this will ensure your items remain protected.
How much will it cost?
Many small handyman operations could pay somewhere between $400 and $900 a year for commercial general liability insurance. But keep in mind that the price you’ll pay for commercial insurance will depend on what type of work you do, the coverages you need, and where you live. Take a look at our Handyman Insurance Cost Analysis to get a better idea of prices.
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