Handyman insurance refers to insurance policies that protect tradespeople who perform general maintenance and repairs for people and businesses. At the very least, handymen need general liability to cover legal fees if a client sues for injuries or property damage. Handyman liability insurance usually costs between $800 and $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 as soon as 10 minutes.
How Much Does Handyman Insurance Cost?
Your main insurance cost is the total annual premium of all your handyman policies added together. For instance, most handymen can get general liability insurance for around $1,300 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 also 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
Insurance Policy | Coverage Amount | Estimated Annual Premium | Deductible |
|---|---|---|---|
General Liability | $1 million per occurrence $2 million aggregate | $800 to $1,500 | $0 |
Commercial Property | $10,000 | $250 to $350 | $500 to $1,000 |
Commercial Auto | $100,000 | $2,000 to $4,000 | $500 |
Workers’ Compensation | $100,000 per accident $500,000 aggregate $100,000 per employee per injury | $5,500 to $7,000 | $0 to $500 |
Surety Bond | $5,000 to $10,000 | 1% to 10% of total bond amount | $0 |
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 business owner’s policy (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.
Handyman Insurance Policies
Because handymen are not 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.
Handyman Insurance Policies | What It Covers |
|---|---|
General Liability | Third-party claims over injuries and property damage |
Commercial Property | Repair or replacement costs business-owned property when it’s damaged, lost, or stolen |
Commercial Auto | Medical bills and vehicle repairs after auto accidents |
Workers’ Compensation | Pays medical bills and lost wages for employees’ work-related injuries and illnesses |
Surety Bond | Covers your client’s financial loss due to your work |
General Liability Insurance
General liability insurance covers third-party claims where a person is hurt or property is damaged as a result of the handyman doing his 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
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
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 on:
- 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 between $500 and $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
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’ compensation 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, or rehabilitation.
Handyman Bond
A handyman bond, or surety bond, is a contract between you, a bond issuer, and your clients that acts like 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 between 1% and 10% of the bond rate, so a $10,000 bond might cost between $100 and $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 are required to obtain a license, there is a good chance you will also need proof of a bond or insurance for the licensing board.
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 at least gets liability coverage. Working in people’s homes leaves you exposed to liability lawsuits over client injury and property damage. The cost of these claims can be devastating financially.
Additionally, a handyman might want insurance because it:
- Helps him 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 his business when employees make mistakes: General liability insurance typically covers mistakes the people who work for you make too.
“A handyman with insurance may seem like an oxymoron to some. Some may even argue that a handyman can’t get insurance because it isn’t a real business. But the fact is that a handyman can get insurance and should have insurance just like any other business to protect themselves and their customers.”
―Flash Shelton, Founder, United Handyman Association
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 is there to take control of claims and accusations against you so that you can continue doing your job. The right insurance company serves as a partner to make sure you have the maximum coverage at a reasonable price.
CoverWallet offers a fast way for you to get the required $1 million per claim general liability policy you need for as little as $35 per month. 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 as quick as 10 minutes.
