Trying to calculate your handyman insurance cost? The answer isn’t simple because there are a lot of factors that go into determining the insurance rates for a handyman business. The size of your operation, how many employees you have, how much coverage you need, and even the number of vehicles you use for business purposes can all impact your insurance rates.
Let’s take a look at the factors that determine your costs, and then we’ll show you an easy way to determine your handyman insurance rates based on your specific business needs.
How Much Handyman Coverage Do You Need?
How much is enough? Licensed contractors are generally required by law to carry a contractor license bond. But handymen may not have any legal requirements (depending on the state where you operate.)
If you’re not required by law to carry it, do you need insurance for your handyman business?
Every business owner faces risks and liabilities. And no matter what your business size or type, the right insurance coverage can protect you from unexpected accidents or incidents that could cost you big.
You should carry enough insurance coverage to protect your business against the risks you’re most likely to face in the handyman business, plus the tools, equipment, and assets you need to get the job done. Here are some of the most popular coverage options for handyman professionals:
There’s a reason we call this the foundation policy for your insurance coverage. General liability insures your business against the risks that you are most likely to face during your day-to-day operations: third-party injuries and damage.
Like accidental property damage to a client’s home.
Or an injury from a passerby tripping over the ladder you just unloaded from your work truck.
General liability is there in case of the accidents you never see coming. The ones that could cost you tens of thousands of dollars (or more) in medical bills or even lawsuits if someone gets injured or suffers a damage as a result of your business. (Check out a few real-life examples of general liability claims to see what catastrophes could strike!)
If you only had the most basic coverage for your business, general liability protection is it.
Factors that may determine your handyman general liability insurance cost:
- Your business type (aka classification)
- Your geographic location
- Your experience/ years in business
- Extra policy features
- Your claims history
Tip: Keep current and future liability rates low by making safety a priority and avoiding accidents that could lead to claims.
Handymen and many other construction professionals often rely on a hard-working vehicle to transport essential tools and equipment from one job to another. Your work vehicle might also advertise your business, and even be your office where you reply to emails, make business calls, and take a well-deserved lunch of coffee break, too.
And if you’re like many other professional handymen, this hard-working vehicle may also play double-duty as a personal car, truck, van or SUV; picking kids up from school, grabbing groceries on the weekend, transporting the family pet to the vets, or filling up with camping gear for a weekend getaway. But if you’re relying on personal auto insurance to cover this multi-tasking auto for both personal and business activities, you may need to reconsider.
Because your personal auto insurance policy most likely won’t cover you for accidents or injuries that arise when your vehicle is being used for business purposes.
If you need commercial auto coverage as a part of your insurance package, here are a few different factors that can determine your handyman insurance rates:
- How many people drive your business vehicle
- How many vehicles your business owns, leases, or uses
- Vehicle(s) make, model, and year
- Driving record - yours, and any employee who drives your autos
Tip: Want to get lower rates on your commercial auto rates? Be sure to check the driving records of any employees or contractors that will drive your business vehicles. Better drivers mean lower risk, and that means lower rates.
Tools and Equipment
If you’ve invested a lot of hard-earned money in tools and equipment for your handyman business, you may want to protect that investment with tools and equipment coverage. Also known as an inland marine policy, tools and equipment insurance protects your assets in transit.
Construction equipment is both high in value and mobile, which makes your tools an attractive target for theft as you transport them back and forth to jobs every day.
If you include tools and equipment coverage as a part of your handyman insurance package, you won’t have to pay out of pocket to replace high-dollar equipment that gets stolen or lost.
Did you know? General liability insurance typically doesn’t cover your tools and equipment if they are lost or stolen.
Got workers? If your business has grown to include employees, either out in the field with you or managing your administrative work, you will most likely have to carry workers’ comp insurance. In most states, workers’ comp is required by law even if you only have one single employee. Workers’ compensation coverage is there to help your employees in the event of an injury or illness as a result of their work.
What determines your workers’ comp costs?
Workers’ compensation premiums are calculated based on factors including:
- Industry classification (less dangerous industries have lower premiums compared to high-risk industries)
- Employee rate code (your office worker who is handling marketing, filing, and setting customer appointments is going to cost less than the field worker who is climbing ladders to clean gutters and handle roof repairs)
- History (your frequency and severity of losses, this is known as an experience mod factor)
Tip: Keep workers’ comp rates lower by emphasizing a culture of safety among your employees.
An easy way to extend the limits of your general liability or commercial auto insurance is to add umbrella coverage to your handyman insurance package. Umbrella insurance offers protection against high-dollar claims situations by kicking in once a claim has reached your policy limits and offering $1 million in extra coverage (or more).
Let’s say you’re working on a repair and turn off your client’s basement sump pump. When the repair is over, you pack up your things and leave, forgetting to turn the pump back on. A weekend of heavy rain floods the basement, and the client sues you for the damage to their home. Between the legal costs, lawyers’ fees, and settlement, the total amount you owe exceeds the limits of your general liability coverage.
Without umbrella insurance, you would be liable for the remaining amount of the claim. With umbrella insurance, your coverage kicks in as soon as your general liability policy hits the limit, protecting you from any out-of-pocket expenses (beyond your policy deductibles).
So What Does Handyman Insurance REALLY Cost?
Now that you see how many factors and variables go into determining your cost, you can see how ridiculous it would be for us to give you a general estimate without knowing anything about you or your business. Because your handyman business is going to be different than the next guy’s, and your insurance needs are as individual as your business model and areas of expertise.
But we can give you a quote, quickly easily and at no cost to you.
All you have to do is provide some basic information, and we can help you determine the real cost of insurance for your handyman business.
You’ve worked hard to build your business, and the right insurance coverage is a smart investment to make sure your hard-earned assets are there for you, no matter what comes your way. Ready to find out how low your rates can be?