Handyman Insurance: Needs, Types, Cost and More

What is Handyman Insurance?

Handyman insurance is a form of small business insurance that protects your business from financial damage. It covers you if you or one of your crew is injured on a job or if a property is accidentally damaged.

Handyman insurance is important because a financial loss could potentially bankrupt your business. In some cases, having a general liability policy is a legal requirement.

Why Do Handyman Businesses Need Insurance?

Insurance provides a financial safety net to protect your handyman business from the risk of financial loss. While you can take measures to mitigate risks, it can take time to predict potential problems when each job you carry out is different.

If your business offers any of the services below, you should consider handyman insurance:

• Carpentry

• Ceiling fan installation or repair

• Cement and concrete work

• Deck, patio, veranda, or porch maintenance, repair, or installation

• Door installation

• Drywall installation and repair

• Electrical work

• Flooring installation, maintenance, or repair

• Framing

• General household or commercial maintenance

• Gutter cleaning and repair

• Home security

• Junk removal

• Moving furniture, appliances, and other household items

• Packing

• Painting interiors or exteriors or staining and varnishing furniture

• Remodeling work

• Plumbing repairs or maintenance

• Tiling and grouting

• Shelving installation

• Smart home installations

• Stonework

• Waste removal

• Window installation

All of these services run the risk of accidental property damage or injury. For example, furniture could be dropped when moved and land on a technician’s foot, or a misplaced screw could puncture a hidden water pipe and cause significant damage. 

Insuring your handyman business protects you from the financial impact of these risks.

What Types of Insurance Do Handyman Businesses Need?

Handyman insurance isn’t one-size-fits-all, due to the industry's jack-of-all-trades nature. You will need to assess how much coverage is necessary for your individual business needs. We advise speaking to an insurance broker for a customized insurance approach.

However, there are seven main types of insurance that handyman businesses should consider. 

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Let’s look into them in detail.

1. General liability insurance

General liability insurance covers your handyman business for property damage and accidental injuries to your clients. 

Your general liability insurance policy will cover the cost of medical bills and any repair work or damages in the event of an accident or property damage. If you’re sued because of an accident, the insurance helps to cover legal fees and settlements.

This type of insurance is perhaps the most important for handyman businesses as it covers the most common risks. However, general liability insurance does not cover medical costs from employee injuries. As we'll discuss later, you will need workers’ compensation coverage for this.

2. Business owner’s policy (BOP)

A business owner’s policy essentially bundles general liability insurance with commercial property insurance. It covers all the common risks that general liability insurance covers and offers protection for your business property, such as equipment and tools.

The policy also covers your offices, office equipment, and inventory from fire or water damage and theft.

BOPs are ideal for small, low-risk businesses and are often cheaper than buying general liability and commercial property insurance separately.

3. Tools and equipment insurance

Tools and equipment insurance is a form of inland marine insurance. It is a floating policy that covers your insured items wherever they are, making it ideal for handyman businesses that regularly move tools between job sites and the office.

This insurance policy covers loss, theft, and damage to tools and equipment valued at less than $10,000. 

4. Professional liability insurance

Professional liability insurance, sometimes called errors and omissions insurance (E&O), provides coverage for handyman businesses in the event of a professional negligence lawsuit. This could arise from a homeowner accusing you of failing to complete a project correctly or on time.

While your business should always strive for excellent service, this insurance policy covers your legal expenses and protects your business from losses caused by mistakes or accusations.

5. Business interruption insurance

If your business cannot operate temporarily and has to shut down, it can result in massive losses. Business interruption insurance protects your company in this event as long as the reason for the shutdown is covered.

Events covered by business interruption insurance include:

• Government-mandated closures, such as during the COVID-19 pandemic

• Evacuation orders due to emergencies like hurricanes or earthquakes

• Power or water supply outages that affect business operations

• Vital equipment breakdowns

• Supplier disruptions that prevent your business from getting required materials and inventory

• Loss and damage to your business premises due to riots

Business interruption insurance covers lost income and ongoing expenses while your business cannot operate. It includes rent for your office space, utilities, and employee payroll.

6. Workers’ compensation insurance

Workers’ compensation insurance, commonly called workers’ comp, is required in most states if your handyman business has employees. If an employee suffers a bodily injury on the job, workers’ comp covers their medical expenses and lost wages while they recover. It also covers work-related illness.

Most workers’ comp policies include employer’s liability insurance, which provides coverage in case of a workplace injury lawsuit.

7. Surety bond

A surety bond is a type of insurance that covers your handyman business if you’re unable to fulfill your contract or agreement terms. If you can’t complete the work a client has paid for, the surety bond reimburses them.

This type of insurance is common on large, complex, or lengthy projects that cost your client a lot of money. It helps guarantee your business will complete the work as laid out in the contract. A surety bond is required for some types of handyman licenses.

How Much Does Handyman Insurance Cost?

Handyman insurance costs between $480 and $1,000 per year for general handyman liability insurance. The total price will vary greatly depending on the other policies you decide to take out. For example, on average, workers' compensation costs are $138 per month, while a surety bond costs around $8 per month.

The cost of handyman insurance depends on the following factors:

• Services offered: The type of work your crew does affects your premium. If your handyman business offers high-risk services like roofing, electrical, plumbing, and structural repairs or modifications, you will pay a more significant premium for coverage.

• Claims history: If your business has a history of insurance claims or liability, insurers are likely to view it as high risk, which means your premiums will be higher.

• Location: Businesses located in areas prone to natural disasters or that have high crime rates tend to pay more for insurance.

• Coverage limit and deductibles: The type of coverage your insurance provides affects the cost. High coverage policies with low deductibles (the amount your handyman business is liable for before insurance kicks in) cost more.

• Business size, number of employees, and revenue: If you have many employees and/or high revenue, you have a higher risk exposure, which means your policies will cost more.

To avoid overpaying, requesting insurance quotes from different providers to compare premiums and coverage is essential. Insurance companies generally offer free quotes so you can find the handyman insurance policy that suits your needs and budget.

How Do I Choose the Best Insurance Provider for My Handyman Business?

While price is an important consideration, it is far from the only factor to assess when choosing your handyman insurance provider. The right provider for your business will depend on your individual insurance needs, but there are vital factors to consider before you decide.

Below are nine essential elements to look for in an insurance provider: 

• Industry expertise: Look for an insurer with experience in the handyman or home services industry, as they are more familiar with specific industry risks and can provide a customized coverage policy for your business.

• Reputation and financial stability: Choose an insurance provider with a good reputation for handling claims and strong financial stability. You can find reviews and financial ratings through independent agencies like AM Best or Moody’s.

• Coverage options: Assess each insurer's coverage options, looking at the range of policies they offer and how flexible their coverage options are. Good providers offer different policies that you can combine to meet your insurance requirements.

• Pricing and deductibles: Choosing an affordable policy is important, but you should understand the premium structure and the deductibles to ensure you’re not left high and dry when it counts. Look for a policy that balances premiums, coverage, and deductibles.

• Claims process: Look for a provider with an efficient, straightforward claims process. You don’t need extra stress and downtime in the event of a claim.

• Customer service and support: Good customer service is crucial when you need assistance or have questions about your policy limits. Choose a provider offering a dedicated agent or a 24/7 customer service line so you know you can reach them when needed.

• Risk management and loss prevention services: Some insurance providers offer risk management and loss prevention services that help you find potential risks in your business and devise strategies to reduce them. This helps to avoid claims by preventing incidents.

• License and compliance: Check the insurance provider is fully licensed, can operate in your state, and complies with local insurance and privacy regulations. 

• Policy renewal and changes: Look at the insurer’s policy renewal and change terms to know how to update your coverage as your business grows or your insurance needs change. Ensure they have a clear and straightforward change process.

The Bottom Line

A comprehensive insurance policy for your handyman business is vital as it offers financial protection in many situations. It’s essential to find an insurance provider who can provide the right level of coverage for your insurance needs and budget.

Striking a balance between managing risks and operating efficiently helps your business succeed and is crucial for sustained growth. Pairing the right coverage with ServiceTitan’s suite of features can streamline your operations, keep clients satisfied, and manage risks effectively.

ServiceTitan is an all-in-one home services software solution used by contractors to streamline workflows, minimize risks, and enhance business operations. It is trusted by over 100,000 trade businesses across the country.