Carrying handyman insurance and surety bonds is a must for your small business. Insurance protects you from accidents and lawsuits, giving you greater financial security and peace of mind. Bonds can help give your customers peace of mind knowing that they’re covered if your contract is broken.
(Look how happy these people are to find a handyman who's insured and bonded!)
Your insurance and bonds keep your business safe, but did you know you can use them to help your business grow, too?
The fact is, having handyman insurance and offering surety bonds makes you look more professional. You can use that image to reel in new clients.
What Your Handyman Insurance Should Cover
Handyman insurance is specifically designed for your handyman business. It protects you and your assets from financial loss because of an accident or mistake made on the job.
Handyman insurance may be composed of a number of different policies, including:
If an accident happens to a third-party on a job, general liability has you covered. If you back your work truck into a telephone poll, you’ll need commercial auto. An inland marine (aka tools and equipment) policy safeguards your tools.
In short, a good handyman insurance policy covers all of your assets and risks.
Why You Need Surety Bonds, Too
If insurance protects you and your business, then why would you need a surety bond?
In a nutshell, your insurance protects you, but your bonds protect your customers.
A surety bond is an agreement between you as the contractor, your client, and your insurance or bond company guaranteeing that you will fulfill your contractual duties. These bonds are required by most public construction contracts and many private ones.
If a client is financially harmed, they can make a claim against your surety bond. The bond company then investigates the claim and pays up to the bond amount. There are several different types of bonds for contractor and handyman businesses. The type you’ll need depends on what your client requests for a given job.
As a handyman, you may be interested in the following contractor bonds:
- License Bond
- Bid Bond
- Payment Bond
- Performance Bond
How Playing it Safe Reels In New Clients
As a business you have an image, a brand. You want potential clients to associate positive traits with your brand. That way, next time they need someone to fix a fence or a leaky sink, the good image they have of your business will come to mind.
Both handyman insurance and bonds tell your customers the same thing: your business is a safe choice.
Without insurance or a bond, customers don’t have a guarantee that you’ll hold up your end of your contractual agreement, or that they won’t be held financially liable if an accident happens.
Market Yourself As The Safe Choice
Help your business grow by using your handyman insurance in your marketing. Your status as insured helps you make it clear that being safety-conscious is integral to how you do business. This can help you can catch the attention of the new clients you need.
Advertise yourself as insured in these key places:
- Your website
- Your social media accounts
- Promotional materials like newsletters, business cards, and brochures
- Online directories such as Yelp and the yellow pages
Important Legal Restrictions on Advertising
It is vital that you know what your state’s laws are on advertising your handyman business. Make sure you understand how you can and can’t advertise before publicizing your ad materials.
Here are a few examples of how you can (and can’t!) advertise your insurance and bond status if you do work in California.
- While advertising yourself as insured can help grow your business, advertising yourself as bonded is illegal in the state of California.
- If you choose to advertise yourself as insured, you must specify what types of insurance policies you carry.
- If you’re licenced as a general contractor you must incorporate your licence number on your advertising materials.
- While you can operate unlicensed as a handyman in California if you charge less than $500 per job, you must note on your advertising materials that you are unlicensed. If you wish to charge more per job than that, you have to become licensed as a general contractor.
The above laws pertain to the state of California. Regulations on advertising insurance, licensing, and bonding, for a handyman or a contractor vary enormously from state to state.
Make sure you check with your state license board and make sure you understand the restrictions in place before you start advertising.
Use Bonds To Get Your Foot In The Door
Certain clients, particularly commercial or government clients, may require that you carry a surety bond as a prerequisite for bidding on a certain job.
For example, a type of surety bond called a bid bond insures that you will honor your original bid price should you be selected for the job at hand. If you don’t honor that price, the client can file a claim against your bond to recover the cost of needing to find a new handyman or contractor for the job. By asking for a bid bond, a client screens out handymen who wouldn’t honor the bid they committed to, or who bid recklessly.
As you can see, having a surety bond can make you eligible for projects you wouldn’t be otherwise.
Having handyman insurance and carrying surety bonds can make your business more competitive. Building a brand that portrays you as trustworthy is a great way to attract new customers. Being insured and bonded is part of building up that professional image.