A handyman is a jack-of-all-trades professional. In this career, you can pursue different types of projects. Unfortunately, these opportunities also come with the risk of injury and liability. An accident or unintended mistake could cause harm to you, your employees or contractors, or the property of a client. In addition to potential physical harm, there could also be financial issues and damage to your professional reputation.
Because of these risks, getting the appropriate insurance policy is a vital part of a business strategy. The policy you choose will depend on a number of factors, including state and local laws, the specific services you offer, and the number of people who work for you.
For example, many states require that a handyman be licensed as a general contractor before bidding or working on projects; this licensing typically requires applicants to be insured and bonded. However, in other places, a general handyman doesn’t need any insurance or a license unless the value of the project exceeds a certain threshold.
It is essential to understand insurance requirements and risk management strategies before you start a handyman business.
Types of Insurance Coverage
Many types of insurance coverage may be beneficial to you as a handyman, depending on your needs and local regulations.
Here are some of the most common types of coverage:
- General liability insurance. If you hurt yourself or a client while working or damage the client’s property, general liability insurance will help cover the costs associated with the incident. General liability policies can also cover situations where the client claims you did subpar work or breached the contract. Insurers also cover any court fees in case of a lawsuit.
- Workers’ compensation insurance may be necessary if you have employees. General liability does not include coverage for your employees. However, workers’ compensation insurance covers lost wages and medical costs if an employee gets injured at work. Depending on your general liability coverage, it may be worthwhile to get workers’ compensation insurance for yourself because a standard liability policy might not cover all of your medical bills.
- Commercial property insurance covers the assets your business owns, such as your tools and workshop. It protects your equipment in case of theft or your workshop against fire or water damage. Note that this policy will not include your work vehicle. For that, you will need to get commercial auto insurance.
- Commercial auto insurance covers the vehicles you use for your business in cases of theft or accidents.
- General business insurance or business owner’s policy bundles the major coverage types — such as general liability, workers’ compensation, and commercial property — under a single policy. These combined policies are often cheaper than individual policies.
Things like general liability and worker’s insurance should be taken out on an annual basis and are the most common policies required by states or local authorities.
Commercial property or auto insurance is not usually the subject of legal requirements, but these policies can help you protect your investment and continue working if your vital equipment gets damaged or stolen.
Handyman Insurance Cost
Handyman insurance is like any other kind of insurance: the cost is influenced by many factors, including the type and complexity of work you’re doing, how many employees you have, state requirements, and contractual requirements.
Risk: Generally, the riskier the services you perform, the higher your premiums will be. In some cases, such as when you’re starting and the jobs you do aren’t overly hazardous, you can survive with minimal insurance. However, as you grow and take on more complex jobs, comprehensive insurance coverage becomes more necessary.
Project Value: The size of the job also matters when determining the cost of insurance. If you service apartment complexes or expensive homes, you need more coverage than someone who services basic apartments.
Equipment Value: You should also take inventory of your tools and property to determine their total replacement value. While not all of them will need to be insured, you should consider insuring the most valuable ones, as they will be the most difficult to replace.
Read our article that compares some of the Best Insurance Companies for Contractors and Trades to learn more.
How to Get an Insurance Quote
There are plenty of insurance options, both in terms of policies and insurance providers. You need to perform research to ensure that you get the correct coverage.
Once you have an idea of what you need, you can compare quotes of providers that meet your requirements. You can either get online quotes for insurance or visit a broker in person. It’s usually easier to obtain multiple quotes online. You should be aware that business quotes differ from personal quotes, so advertised rates from a particular company may be higher for businesses than for individuals.
You should expect to answer a few questions about your business before you can obtain an accurate quote. If you feel overwhelmed by the process, consider asking for referrals to reputable brokers from your friends in the handyman business. A broker can help you compare quotes and choose a policy based on your needs.
Why Should You Get Handyman Insurance?
Handyman insurance, like any other insurance, offers the benefit of peace of mind. You know your medical bills, property, and client’s property are all covered, and you can therefore work with more confidence.
It’s also necessary for building trust with your clients, as they are more likely to hire you if they know you carry comprehensive insurance.
In fact, some clients won’t hire you unless you’re insured, regardless of what the local regulations are. Of course, handyman insurance can also be mandatory, depending on the state you’re registering in and the nature of your work.
What to Expect from Legislation Surrounding Handymen Insurance
Insurance requirements get decided at the state or local levels, just like licensing. Therefore, you should check for your state’s requirements to determine whether you need insurance or a contractor’s license to work professionally.
Requirements for such licensing often include being bonded and insured with general liability insurance and worker’s compensation (if you have employees).
If the state or local laws require coverage, you cannot operate legally without a policy.