As a handyman, you know that accidents happen. People break stuff, things fall apart, and stuff goes wrong. However, what about when something goes wrong on your end? Say that you are doing a job and something goes wrong. Now the client wants to hold you responsible. That is where handyman insurance comes in. It can protect you from potential litigation and damages against your handyman business.
Overall, the typical handyman’s general liability policy costs anywhere between $35 to $100 a month. Most businesses end up paying less than $1,000 per year for liability insurance.
A standard business owner’s policy includes all the basic insurance provisions a handyman needs and usually costs anywhere between $500-$3,000 per year. Most businesses end up paying less than $2,000 for general liability, workers’ compensation, and auto insurance.
Anyone who works on home projects knows that a small issue can balloon into a giant legal problem, especially when you are working in a commercial setting. In that sense, handyman insurance is practically a necessity for your business. So we put together this comprehensive guide on the costs of handyman insurance so you can always be ready.
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What is Handyman Insurance?
A handyman is a person who performs uncontracted home maintenance and small home repair jobs. Given that handymen work in people’s homes, there is a risk that something may go wrong. To that end, handymen carry insurance to protect them against lawsuits and liabilities.
The typical handyman policy is a simple general liability policy with professional liability endorsements for the handyman profession. Handymen may also need commercial auto insurance or workers’ compensation insurance if they have employees on the job site. A solo handyman who does not have an office and that has no operating expenses may only need a general liability policy.
To that end, there is no such thing as “handyman insurance” per se, but separate policies bundled together for a handyman. We will cover the costs of the major kinds of insurance that handymen need. These are the kinds of insurance policies that would be useful for a handyman or other home project expert to have.
Handyman Insurance Cost
General Liability
The basic kind of insurance policy that a handyman need is a general liability policy. General liability policies protect you and your workers from litigation related to accidents and third–party injuries on the job site. For example, say that you are fixing a door, open it, and accidentally hit the client’s child. General liability insurance may protect you from legal damages and cover any medical expenses if the child has to go to the hospital.
The typical general liability policy for a small business only costs about $30 a month, or around $300 a year. That is the average cost for a standard liability policy, regardless of the limit. Most liability policies have a $1,000,000-$5,000,000 coverage limit.
Liability coverage is based on several things, including your previous insurance history, location, and exact nature of your work. So one contractor might pay a smaller premium than another. Either way, only about 1% of small businesses end up paying more than $100 a month for a general liability policy.
Professional Liability for Handyman
General liability policies typically cover a relatively limited number of business liabilities. Professional liability insurance is available to provide extra coverage for issues unique to a specific industry or business.
Professional liability insurance is a bit more specialized. The majority of small businesses pay around $50 a month or around $500 a year for professional liability insurance. Professional liability insurance covers things like errors and omissions from your business. For a contractor, professional liability can cover things like faulty installations or other kinds of professional errors that can happen on the job site.
Very often, businesses will combine general and professional liability coverage on the same policy. So look for insurance bundles to save as much money as possible.
Workers’ Compensation Insurance
If you have employees on the job site, then you will most likely need workers’ compensation insurance as well. Workers’ compensation insurance costs around $40 a month for most businesses, or around $400 a year.
The exact cost of workers’ compensation varies depending on how many employees you have. Generally speaking, the cost of workers’ comp comes out to around $1.25 per $100 of payroll per month. So if you have $3,000 of payroll per month, you can expect to pay around $40 a month in workers’ compensation insurance.
Keep in mind that workers’ comp insurance may be more expensive depending on the kind of service that your workers are doing. Riskier work may incur a higher insurance premium.
Commercial Auto Insurance
If you plan to drive a commercial vehicle to and from your appointments, then you should consider commercial auto insurance. Commercial auto insurance is similar to personal auto insurance though usually has higher limits and, since the car is owned by your business, will not affect your personal finances.
The average commercial auto policy costs approximately $142 a month, according to Insureon. Commercial auto insurance is usually more expensive than other types of insurance because insuring vehicles carries a lot of risks.
Again, you are not legally required to have commercial auto insurance, but it can help in the event that you get into an accident on the way to work.
Handyman Bond
A “handyman” bond, also called a surety bond, is a type of contract that acts to insure your work for your client. A handyman bond will cover an expense in the event a client claims they suffered losses or damages because of your work.
For example, say that you performed some piping work and then the client claims that a leak sprung and caused monetary damages to their store. A surety bond can act to cover those damages. Some states require professionals to have surety bonds but requirements are not universal.
The typical rate for a surety bond is around 1% to 10% of the total bond rate. So for example, a $10,000 Surety bond would cost anywhere between $100 to $1,000. The higher your credit score, the better rate you can usually get on a surety bond.
Business Owners Policy Cost
One option for handyman insurance is to purchase a business owner’s policy (BOP). A BOP is a package of commercial insurance policies that are meant for businesses. A BOP may include general liability insurance, workers’ comp insurance, and commercial auto insurance.
A BOP is often a smart way to save on insurance costs. The typical BOP costs anywhere between $500-$3,000 a year. Most businesses pay less than $2,000 for business owner coverage. Only 1% of small businesses pay more than $3,000 a year for business insurance coverage.
That is why we recommend looking for a BOP. They can save you a lot of money by bundling together common commercial insurance products.
Handyman Insurance Deductible and Coverage Limits
Generally speaking, a general liability policy does not have a deductible. However, some plans may include a fixed rate or a percentage deductible.
The average deductible for a commercial property policy is around $500-$1,000 while the average deductible for a workers’ comp policy is around $500. The deductible for a workers’ comp policy is usually dependent on the total number of employees that you have.
As far as coverage limits go, the standard handyman liability insurance policy offers around $1 million to $2 million in coverage. The typical commercial property policy should give you around $100,000 in coverage, depending on the kind of property damage. A typical workers’ comp policy usually has a limit of around $100,000 per incident or $100,000 per employee injury.
Keep in mind that for any insurance policy, there might be different deductibles for different types of coverage. For example, a deductible for property damage from a fire might have a different deductible than coverage for property from a windstorm.
Best Handyman Insurance Providers
Here is a list of some of the top handyman insurance providers.
Next Insurance
Next Insurance is a relatively new online insurance provider that offers several types of commercial insurance products, including handyman insurance. Their handyman insurance selection includes a general liability policy, workers compensation, commercial auto, tools/equipment insurance, and commercial property insurance if you own an office.
Next Insurance plans for handymen start at as little as $29 per month. Their insurance plans have very high limits as well. The general liability policy has a $300,000 limit while the workers’ comp has a $100,000 limit.
Hiscox
Hiscox offers a wide range of commercial auto insurance including general liability for handymen. Their handymen liability policy includes coverage for bodily injury, personal injury, or any property damage that occurs while you are on the job.
Hiscox offers online quotes and their insurance plans start at as little as $30 a month for a $1 million limit. Their general liability policy also does not have a deductible
The Hartford
The Hartford offers excellent commercial insurance coverage, including liability coverage for handymen and contractors. In addition to the typical year-long insurance policy,
The Hartford also offers per-project insurance packages. So, if you cannot afford year-long insurance then you can opt for one of the per-project plans. For example, you can get $300,000 in coverage for a 4-hour job for just $7. The only downsides of going to The Hartford for insurance are that plans are usually more expensive than the average insurance plan, and you cannot buy many of their standard policies online.
Progressive
Progressive Insurance offers handyman policies that include general liability and commercial auto insurance. You can also add workers’ compensation to your policy for an extra fee, or you can buy a standard business owner’s policy (BOP).
A Progressive BOP will provide most of the basic insurance protections that you need out of an insurance plan, including property insurance, commercial auto insurance, and general/professional liability insurance. The best way to get a price estimate for a Progressive insurance plan is to call the company and talk to an agent for a quote.
Simply Business
Similar to Next Insurance, Simply Business, is a relatively new online insurance company that emphasizes coverage for small businesses. Simply Business partners with several carriers to maximize coverage and provide flexible policies for individuals and businesses.
They do everything online so you can apply and get an online quote in just minutes. Quotes can start at around $80 per month for general liability coverage. That’s a bit more expensive than some other companies but their policies have a very high $2 million limit. Note, however, that Simply Business does not offer commercial auto or workers’ compensation insurance plans.
CoverWallet
CoverWallet is an online insurance broker that features plans from some of the most well-known insurance companies in the business. CoverWallet plans are highly flexible and you can search and add general liability coverage, commercial property, commercial auto, and more to your policy.
CoverWallet policies start at as little as $39 a month for general liability insurance and $49 per month for a BOP. You can get a COP plus a commercial auto policy starting at $239 per month. One notable benefit of a CoverWallet policy is that they do not charge extra for certificates of insurance. So you can get documents for free if your client asks to see them.
Tips for Buying Handyman Insurance
Job Type
Depending on the specific kind of job you do, your insurance premiums might be different. For example, do you do a bit of everything, or does your work mostly focus on walls or windows? If you specialize in something low-risk then you can get a discount on your insurance premium.
Revenue
Generally speaking, insurance costs will take your revenue into account. Some types of handyman insurance will cover business interruption. This kind of coverage will be based on your income.
Equipment Insurance
Equipment insurance is another important type of coverage to look for. A general liability policy will often have provisions for equipment insurance to cover any tool malfunctions or failures.
Tools used for home renovation projects can cost thousands of dollars so having them insured is usually a good idea. You can get optional tool coverage for as little as $14 a month or less than $180 a year.
Cover Subcontractors
As a handyman, you may or may not work with subcontractors. It’s important to see if your handyman insurance policy covers subcontractors. If your policy does not cover subcontractors, and they accidentally make a mistake, then you could be on the hook for thousands in damages.
Frequently Asked Questions
Do I need handyman insurance?
Most states do not have some kind of insurance required to work as a handyman. So, insurance is not necessary, but it is highly recommended.
A liability policy can save you thousands in expensive litigation if someone gets hurt while you are on the job. Liability insurance can also protect you from more mundane issues like advertising issues or omissions.
How much does handyman insurance cost?
Most businesses pay around $30 a month or $300 a year for general liability. The typical business owner’s policy costs between $500 to $3,000 a year.
Most businesses pay less than $2,000 a year for insurance coverage. The total cost of insurance depends on your previous practice behavior and track record.
What does handyman insurance cover?
General liability policies cover physical injuries that may happen while you are working and physical injuries that may result from your workmanship. A professional liability policy will cover things like errors or omissions from your services and can protect you from claims of negligence.
What other kind of coverage does a handyman need?
If you drive a commercial vehicle to and from your appointments, then you may want to consider commercial vehicle insurance.
This kind of coverage will protect you in the event of an auto accident while on the job. If you have employees, then you may also need workers’ compensation insurance. This kind of insurance will pay for medical expenses if one of your workers is injured while working.
Is handyman insurance worth it?
Even if you are a sole proprietor, do not have an office, and do not have any expenses, some kind of general liability insurance can be worth it. You never know when something will go wrong, so you want to make sure that you are covered.
Other Insurance Cost Guides
Conclusions
Handymen always need a way to make sure that any mishaps on the job are covered. Handyman insurance, including general liability and other types of insurance, is very useful for a handyman and can potentially save you thousands in damages and litigation costs.
So even if you operate as a sole proprietor with no office, it can be in your best interest as a handyman to make sure you are covered. The good news is that general liability insurance is fairly cheap.
