Although handyman insurance is not required in most states, without the proper protection, a handyman business can be financially devastated in the event of an accident, injury, or lawsuit.
A single accident can bankrupt a small business. Lawsuits can take years to resolve and cost tens of thousands of dollars in legal fees.
Protecting your business with comprehensive liability insurance can protect your assets in the event of an accident or lawsuit.
In this blog post, we answer the question; what insurance do you need to be a handyman, and look at different types of coverage that are available to Handymen and Handywomen, as well as cost estimates for business insurance.
Let’s get into it!
What insurance do you need to be a handyman in 2022?
First up: Is handyman insurance required?
Insurance is not required to provide handyman services, but it’s always good practice. If you damage a customer’s home or belongings while working on their behalf, you will quickly appreciate the need for handyman insurance.
A lot of people think that since licensed contractors must have professional liability insurance then the same should apply when doing small jobs at private residences. Licensed contractors are required to have business insurance, but handyman projects can expose you to the same type of risks and liabilities as a contractor.
It’s always a good idea to check with your local government agency to verify your basic requirements to provide handyman services in your area.
Handyman Insurance – Bottomline: Buy General Insurance
Okay, you recognize the need to buy handyman insurance for your business, but with so many options out there, what must-have policy do you need to get started?
If you’re a self-employed handyman, the one handyman insurance policy you should consider is general liability insurance.
Liability insurance is important for anyone who has employees because it covers any accidents that happen on the job. Handyman liability coverage will protect you from being financially liable if something goes wrong at your customer’s home and they get injured while interacting with either yourself or your equipment.
Protect Your Assets By Registering Your Business As An LLC or Corporation
By setting up your business as a registered corporation, or LLC (Limited Liability Corporation), you are in essence protecting yourself from having your personal assets seized for debts or obligations of the business.
For further information on this topic, this article is a good resource.
FAQ’s
What is handyman insurance?
A comprehensive Handyman insurance policy is designed to protect handyman and handywoman contractors against the liabilities and risks they face while working at a client’s property. Mistakes can happen and potential lawsuits against your business can be financially devastating.
Handyman insurance is important because it ensures you have the financial support needed in case of a lawsuit or an accident resulting from your work.
Does a handyman need insurance?
Although it may not be required by law, a handyman insurance policy is a must-have for any self-employed or independent contractors who work with tools. It will protect you from damage, loss, and financial fallout of third-party lawsuits.
Also, If you work as a subcontractor, you may be requested to provide proof of insurance to get hired for work, or one of your customers may ask to see that you have proof of insurance before you can get started on the job.
What types of insurance coverage do you need?
Regardless of the types of services you offer, it is vital to have insurance coverage specifically designed to protect you from the risks you may encounter and the equipment you own. Therefore it is important to talk to a professional insurance advisor to ensure you are covered if you need it.
A comprehensive handyman insurance package typically includes the following coverages:
- Commercial General Liability Insurance: CGL coverage can provide you with financial support for your legal expenses and court-ordered settlements if you are sued by a client concerning third-party bodily injury or property damage.
- Tools and Equipment Insurance: Theft and damage to property is a major issue for contractors. Tools can be expensive, so they must be covered by insurance! This coverage will replace or repair your tools in case of fire or flood as well as theft.
- Pollution Liability Insurance: Pollution liability coverage ensures that you are protected from the financial consequences of pollution-related events. This includes third-party bodily injury and property damage claims, as well as clean-up costs for gradual or immediate environmental damages.
- Commercial Property Insurance: Commercial property insurance provides you with financial coverage for physical loss or damage to your business assets because of severe weather events like fires, floods, vandalism, and theft.
- Commercial Auto Insurance: If you use your vehicle for business purposes, whether it is a car, pickup, or utility van – you may require a commercial auto policy. The auto insurance for commercial vehicles is different than private-passenger cars. The coverages are similar but not designed to protect you from damages or provide coverage if in a collision while using your company car for business purposes.
- Cyber Liability Insurance: Cyber liability insurance is a great way for small businesses and self-employed professionals to protect themselves from the risks associated with having their computing systems hacked. This type of cover pays you if there’s an accidental data breach, as well as repairing or restoring damaged software after it has been targeted by hackers in cyberattacks that steal personal information like bank account numbers!
How much does handyman insurance cost?
We referred to several popular insurance companies to get an idea of what the typical costs are for a basic small handyman business that serves residential customers and found policies as low as $450 per year range for commercial general liability insurance with a $2 million coverage limit.
However, the average cost for a general liability policy is closer to $800 per year, with $1 million in coverage. You can get an online quote from insurance providers such as insureon to start shopping for the best deal.
Most insurance companies will look at the risk factors associated with the services you offer when assessing the cost of your policy, including:
- The number of employees or support workers
- The type of services offered
- The business owners’ experience
- The tools and equipment being insured
- Any previous claims
Is there a difference between handyman insurance and contractor insurance?
From our research, there does not appear to be any significant differences between handyman insurance and contractor insurance.
Contractor insurance and handyman coverage are designed for the self-employed. The two types of policies have similar features, but there can be differences in what they cover based on which type you choose as well as how much risk is worth taking with those risks.
Am I liable for subcontractors I may hire for projects?
If you hire subcontractors to provide services for your job, and those workers cause damage to the property without being insured themselves-you could be held liable.
To avoid this situation ensure any subcontractors hired carry valid certificates of coverage or contact a broker so they can get added to your policy as additional insured’s!
Summary
Although there are many benefits to being a handyman, you should seriously consider protecting yourself, your business, and your liabilities with at least a very basic general liability insurance policy.
You will also be demonstrating to your prospective customers that you are a professional service provider, and someone they can trust to protect their property in the event that something goes awry.
Disclaimer: Today’s Cottage Living does not offer insurance policies of any type and our researchers are not qualified insurance agents. Please consult a qualified insurance company for your specific needs.
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