Locksmith Business Insurance: Types, Cost & More

What Is Locksmith Insurance?

Locksmith insurance is a legal contract that protects locksmith contractors against various risks. 

This coverage typically includes general liability, property damage, and safeguarding the business from potential lawsuits or unforeseen events. 

The insurance policy clarifies its scope, what it covers, the limits of coverage, and the amount you’ll pay periodically. 

For example, if a client claims that you damaged their door during a lock installation, general liability insurance would cover legal fees and settlement costs. 

Disclaimer: "ServiceTitan does not provide insurance or financial advice. This information is for educational purposes only. Consult a professional for insurance and financial advice."

Why Do I Need Locksmith Insurance?

Locksmith insurance goes beyond legal compliance and offers financial protection against accidents, employee injuries, property damage, and advertising injuries. 

Comprehensive liability coverage prevents significant out-of-pocket expenses and keeps your business’s financial state on track. 

Also, having your locksmith business insured shows your clients you are trustworthy, reliable, and credible. 

It demonstrates that you can cover any unforeseen expenses. Some clients might ask for proof of insurance before doing business with you. 

Lastly, locksmith insurance gives you peace of mind and allows you to manage the inevitable risks of the trade. 

This peace of mind lets you focus on what you do best: providing top-notch locksmith services to your clients. 

What Does Locksmith Insurance Cover?

Now that you know why locksmith insurance is important, let’s explore what it covers. 

By insuring your locksmith business, you protect it from various risks and potential financial burdens, including the ones below. 

Third-party, non-employee bodily injury

This coverage protects you if a non-employee, like a client, gets injured due to your work. For example, if a client slips and falls on your worksite, this policy will cover any related medical expenses and legal fees. 

Third-party property damage

Damaging a client’s door while installing a lock is not uncommon. 

Regardless of the type of property damage that happens, this part of the insurance will cover the repair or replacement costs. 

Defense costs

Legal battles can be costly and time-consuming. If, for whatever reason, a client or third party sues your business, defense costs can quickly add up. 

Who wouldn’t want to avoid that?

With locksmith insurance, you’re covered for these expenses, including attorney fees, court costs, and any settlements. 

This coverage is essential because lawsuits, whether justified or not, happen more often than you might think. 

Next, we’ll look at the types of business insurance you might need as a locksmith professional. 

What Types of Business Insurance Do Locksmiths Need?

To decide which policies best fit your locksmith business needs, you must first understand the different types of business insurance available for locksmiths.

Let’s look at each of these popular locksmith business insurance policies in detail. 

General liability insurance

General liability insurance protects your business from claims of bodily injury, property damage, and personal injury during your locksmith operations. 

The main things that this insurance covers are legal expenses, medical bills, and court settlements. 

Best for: If you want to be covered in case a client gets injured on your job site or you accidentally damage a customer’s property while installing a lock, general liability coverage is the best fit. 

Business owner's policy insurance

A business owner's policy (BOP) combines several essential insurance coverages in a bundle sold at a premium. 

By choosing a BOP, locksmith contractors and businesses are protected against property damage, theft, peril, and liability claims.  

BOPs are typically available to locksmith businesses with annual revenue of less than $5 million or a maximum of 100 employees. 

Best for: Small business owners looking for a cost-effective way to get broad locksmith insurance coverage. A BOP simplifies insurance management and protects all critical aspects of the business with one policy. 

Workers’ compensation insurance

A workers’ compensation insurance policy covers the medical costs and payroll expenses of employees injured on the job. 

Workers’ compensation insurance is required in many states for locksmith businesses with employees. 

Best for: Small locksmith businesses that need to comply with state laws and protect against financial loss due to workplace injuries.  

Commercial auto insurance

Locksmith service technicians often rely on vehicles and transport tools to reach clients. 

If your employee gets into an accident while driving a company vehicle, you could end up paying a lot of money for property damage or medical expenses. 

Commercial auto insurance covers these costs and could also protect against:

• Vehicle theft

• Vandalism

• Damage from natural disasters

In most states, liability insurance is required for any registered vehicle. 

Best for: If you are a locksmith contractor or have a locksmith business that uses vehicles for work operations, this type of insurance is a must. 

Tools and equipment insurance

Your locksmith tools and equipment help you do your job efficiently, so it’s essential to protect these investments if they are stolen, damaged, or lost. 

You can add equipment insurance to your locksmith liability insurance or business owner’s policy. 

You’ll typically get coverage for small locksmith tools no older than five years old, but you’ll not be covered for general wear and tear. 

Best for: Locksmith contractors and businesses that heavily rely on specialized tools and equipment.

Professional liability insurance

No matter how well you know your trade, sometimes mistakes happen. If a customer sues your locksmith company for any of the following reasons, professional liability insurance protects you:

• Faulty lock installations that lead to security breaches

• Errors or omissions in key duplication resulting in unauthorized access

• Negligence in performing locksmith services that cause client property damage

• Failing to complete a job as promised

With professional liability policies, coverage does not apply to subcontractors and can’t be used to cover losses resulting from dishonest acts like intentional damage. 

Best for: Since mistakes can happen to anyone, any locksmith contractor or business should have professional liability insurance. 

Now that you understand the types of insurance your locksmith business might need, you’re probably wondering about the costs involved. 

We’ll discuss this below. 

How Much Does Locksmith Insurance Cost?

There is no such thing as a set price for a locksmith insurance policy. The cost of your premium comes down to many things, including:

• Your business’s size

• Coverage types required

• Your location

• Claims history

• Equipment value

On average, locksmith insurance costs can range from $39 to $49 monthly. Comparing free quotes from different insurers can help you find the best coverage for the lowest rates. 

Next, let’s detail the factors that influence your locksmith insurance costs.

What Factors Affect Locksmith Insurance Costs?

As we already mentioned, every insurance policy is unique, and its cost reflects many things, like where your business is based and how many employees you have. 

Here are some common factors affecting the price of locksmith insurance:

• Location: If your business is located in an urban area with higher crime rates and increased traffic, the premium might be higher. The price is directly proportional to the risk of theft, vandalism, and accidents. 

• Revenue: The higher your business revenue, the higher your insurance premiums may be. That’s because insurers see higher revenue as an indicator of more extensive business activity and greater risk exposure. 

• Number of employees: Having more employees increases the risk of workplace accidents and liability claims. Higher risk can drive up insurance costs.

• Insurance claims history: A history of frequent claims suggests higher risks, which can lead insurers to charge more. 

• Coverage limits and deductibles: With high coverage policy limits, you get more protection but must pay more. Also, higher deductibles can lower your monthly premium but increase out-of-pocket expenses if a claim happens. 

Awareness of these factors helps you anticipate your insurance costs and budget accordingly. 

After you have your budget in place, it’s time to find the right insurance provider.

How to Choose the Right Insurance Provider

There are so many locksmith insurance providers that you might feel overwhelmed with so many to choose from. 

To ease your search, here are five tips for choosing the right insurance provider without headaches:

• Consider your needs: The right policy is based on your specific needs. It may be helpful to ask yourself, “What specific risks does my locksmith business face?” or “Which types of business insurance coverage are legally required for my business?” Asking questions like these will clarify your insurance needs. 

• Do your research: Compare multiple insurance companies, their offerings, reputation, experience in insuring locksmith businesses, etc. 

Sebastian Hov, CEO of 18 Insurance, reveals customization is an important thing to look for. “Look for carriers that allow you to tailor your coverage to your specific business needs, as well as the possibility of adjusting your deductible. Some may even offer a discount for bundling multiple types of coverage.”

• Ask questions: Understanding what the insurance covers and what it doesn’t is key to ensuring you’re choosing what’s right for your business. Asking detailed questions helps you understand the scope of the policy and its limitations. 

• Read the fine print: Carefully reviewing the terms and conditions of each policy can help you avoid unpleasant surprises if you need to file a claim. Things to pay attention to when reading the fine print are coverage limits, deductibles, and any exclusions that might affect your coverage. 

• Consider a broker: You can also take the shortcut and hire an insurance agent to find the right provider for you. Brokers have experience and access to multiple insurance companies and can guide you to the best decision. You’ll pay some money out of your pocket, but you’ll save time and potentially reduce your premiums. 

How Locksmith Software Gives You Added Protection

Insurance is only one tool that helps you safeguard your locksmith business and keep business operations efficient. 

Locksmith software can also help you deliver quality services that keep customers happy and protect your business from lawsuits. 

With ServiceTitan’s Locksmith Service software, you can automate important business operations, like booking and dispatching, and track jobs and inventory from one place. 

ServiceTitan’s Field Service App lets technicians build estimates with just a few taps, send real-time updates to the office team, and close sales out in the field. 

ServiceTitan’s Customer Experience platforms give locksmith technicians all the information they need to arrive fully informed to the job—customer names, addresses, contact info, and CSR notes.

Through ServiceTitan’s Service Scheduling software, locksmith contractors and businesses can plan jobs weeks and months ahead and organize their schedules with custom tags. 

Dispatchers can monitor technicians’ real-time progress to plan job appointments accurately and reduce the risk of missed appointments.

The Bottom Line

By following the best practices from this article, you are more than equipped to choose the right insurance policy and provider for your locksmith business.

Research, get insurance quotes, and secure the right coverage to safeguard your revenue, employees, and clients. 

You might also want to consider locksmith software like ServiceTitan to streamline your operations, reduce errors, and limit risks. 

ServiceTitan is cloud-based software that helps locksmith companies automate their daily operations, deliver quality customer service, and grow their business. The world's top locksmith service contractors use ServiceTitan's tools to succeed.