What kind of insurance does a handyman need

Basic handyman insurance coverage includes commercial auto and general liability to cover legal fees if a client sues for injuries or property damage. Usually, handyman insurance for both general liability and commercial property costs anywhere from $250 to $1,500 per year.

One of the best ways to save money on handyman insurance is to compare offers from more than one carrier. A broker like CoverWallet can be a big help with that because it gets quotes from multiple insurers with one application. Most handymen can get up to $1 million in general liability insurance in less than 10 minutes.

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Handyman Insurance Policies & Coverage

Because handymen aren’t saddled with insurance requirements, they must consider their overall risks to decide which policies to purchase. General liability and property—typically bundled in a BOP, along with commercial auto—are among the most common types of insurance policies for handymen.

Click on the tabs below for more information on each handyman insurance’s coverage.

General liability insurance covers third-party claims where a person is hurt or property is damaged as a result of the handyman doing their job. Policies cover a wide range of claims handymen often see, including

• Damage to the properties where you work
• Failure to complete work you promised to perform
• Medical and repair for accidents your operations cause
• Accusations of defamation

The biggest potential risk to a handyman business is a costly injury or property damage claim. Uninsured claims result in lawsuits and judgments that linger over credit scores, bank accounts, and income for years. General liability is a cost-effective solution to protect against this.

Tip: Working in million-dollar homes has more risk for bigger losses and even potential lawsuits. Keep this in mind as you choose your liability coverage limits.

Commercial property insurance covers your business-owned property, whether that’s a workshop or the tools you store in it. Because handymen often have to work at their client’s home or business, many insurance companies include inland marine coverage on their property policies. Property policies typically only insure items at the address on the policy, so adding inland marine ensures your tools and materials are covered while at other locations or while they’re in your work vehicle.

Commercial auto insurance covers company-owned vehicles in accidents or incidents of theft. Most states require business owners to get at least some liability coverage, but you can also choose to add the following:

• Collision: Covers damage to your vehicle if it’s damaged in an accident
• Comprehensive: Covers damage to your vehicle if it’s damaged by something other than an accident
• Uninsured/underinsured motorist: Covers your losses if your vehicle is damaged by someone driving without sufficient insurance
• Medical payments: Covers medical costs for you or your insured driver and passengers regardless of who caused the accident

You can get coverage limits of $550,000 to $2 million with a deductible anywhere from $500 to $1,000. Costs are contingent on vehicle year, make, and model—as well as the driving history of any named drivers. Items stored in the vehicle are not covered by auto insurance and must be covered by equipment protection like inland marine.

Workers’ compensation insurance covers medical bills and lost wages for employees who suffer accidents at work. Even if you’re a one-man handyman business, you might consider workers’ comp insurance for financial protection in case you’re injured and can’t work. Getting a policy for yourself means your medical bills are paid up to personal coverage limits. It can also pay for your lost wages, required prescriptions, and rehabilitation.

A handyman bond, or surety bond, is a contract between you, a bond issuer, and your clients that acts as a guarantee for your work. If a client claims they suffered a financial loss because of something you did, they can file a claim on the bond for the issue to cover. Some local governments require bonds for tradespeople, but they’re often useful because they assure potential customers that your work will be performed professionally.

Surety bonds generally cost anywhere from 1% to 10% of the bond rate, so a $10,000 bond might run $100 to $1,000. A handyman with good credit typically gets a rate on the lower end of the scale.

Tip: Some states, such as Maryland, require a handyman to have a license to perform any services. Others, such as California and Hawaii, make handymen get licenses when jobs reach a certain dollar value. If you’re required to obtain a license, there is a good chance you’ll also need proof of a bond or insurance for the licensing board.

Handyman Insurance Costs

Your main insurance cost is the total annual premium of all handyman policies added together. For example, most handymen can get general liability insurance at $1,500 per year. Adding commercial property insurance to your list of policies may add another $250 to your total costs, depending on how valuable your business property is.

In addition to your annual premium, you may have out-of-pocket costs for deductibles or claims that are above a policy’s per occurrence limit. For example, let’s say you have a $100,000 coverage limit on your commercial auto policy, but you’re found liable for an accident that causes $150,000 of damage. You’re on the hook for that extra $50,000, plus you may have to tack on another $500 to $1,000 if your policy has a deductible.

Handyman Insurance Costs by Policy

How to Balance Cost and Coverage for Handyman Insurance

Buying insurance usually means balancing the amount of coverage you need with how much it costs. For example, you have to evaluate your risks, such as the size of the jobs you do and the clients you work for. Working in multimillion-dollar mansions may mean you need higher coverage limits than you would if you worked on small tract homes because the potential claims are more costly.

You also need to consider the cost of your equipment and vehicle. Insuring every tool might not be worth the additional premium if you have access to affordable replacements. Generally, you only want to insure the things your business couldn’t function without. That way, you can keep costs down while still having enough coverage to get you back to work quickly after a major loss.

BOPs Save on Handyman Insurance Costs

Many insurance providers have a BOP for handymen. This is a hybrid policy that combines handyman liability insurance with business property and business interruption insurance for a lower premium than buying each separately. By packaging these policies, insurers make it easy for you to get fundamental small business insurance while minimizing the chance that you’ll have coverage gaps. BOPs are usually the most cost-effective way for a handyman to get covered.

Why Does a Handyman Need Insurance?

Unless you’re working as a licensed contractor, most handymen aren’t required to get insurance. However, we still recommend every handyman gets at least liability coverage. Working in people’s homes exposes you to liability lawsuits over client injury and property damage. The cost of these claims can be devastating financially.

Some may think that a handyman cannot get insurance as it isn’t a real business. As with any other business, however, handymen can and should get insurance to protect themselves and their clients. If you’re convinced you need insurance for your business, then you might want to check our list of best handyman insurance companies.

Additionally, a handyman might want insurance because it

• Helps them win clients: Some people won’t hire you unless you’re bonded and insured.
• Makes licensing easier: If you do want to work as a contractor, most states require you to carry liability insurance.
• Protects their business when employees make mistakes: General liability insurance typically covers mistakes the people who work for you make.

Bottom Line

It’s important to have enough insurance coverage for your handyman business so that you’re not crippled by one mistake on the job. Handyman insurance takes control of claims and accusations against you so that you can continue doing your job. The right insurance company serves as a partner to ensure you have the maximum coverage at a reasonable price.

For as little as $39 per month, CoverWallet offers a fast way for you to get the required $1 million per claim general liability policy you need. It specializes in helping the handyman industry, and it can get you covered quickly. You can fill out an online application from your phone and be covered in less than 10 minutes.

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