Insurance can be complex, and there are different types of insurance that companies will try to sell you if you are a handyman. This raises the question of how much handyman insurance, especially so that you can have the coverage you need to be self-employed.
Typically, liability insurance covers things like if the basement floods or a customer trips over an extension cord and sues us. This way, we can protect ourselves financially if we damage a client’s home or the client himself.
We must consider that a small mistake could put us in financial trouble and even force us to close our business forever.
Is insurance mandatory to operate this type of business?
Normally we will not need insurance to provide the services of maintenance personnel. However, if we are licensed contractors or looking to become one, it would be best to have this type of insurance.
The purpose of these coverages will be to limit the damage if we cause damage to our client’s home or belongings. However, in some cases, an insurance policy will be required before starting the work, such as in apartment complexes or bank-owned properties.
If our business starts, we can avoid the expense and invest the money in other sections of the business, but always accept basic work. Without insurance, accepting plumbing or electrical work is not a good option because we will need protection against possible accidents.
What is the price of Handyman insurance?
If we look for a general liability plan, we typically pay between $360 and $1000 per year for liability plans. The premium may depend on where we live, the services we offer, the volume of sales, and the number of employees we have.
In case we have roof repair services, chances are that in these cases, a claim can be filed so that the premium will be higher. Some companies, such as Insureon, offer an average of $800 per year, although construction companies tend to pay higher policies.
What should these types of policies look like?
Liability insurance for these types of workers must meet the following characteristics:
- Have liability coverage of at least $1,000,000 per claim.
- The total coverage limit of $2,000,000 per year.
- Deductible of $1,000.
We can opt for these standard coverages, although hopefully, we won’t cause such extensive damage to a client’s home. However, we can file as a multi-member LLC or a corporation to protect ourselves against business risks and avoid paying too much money.
Additions that can be made to Handyman’s Insurance
Most contractors and handymen need only general liability insurance. However, if we are going to scale our business, we may need additional coverages such as:
Commercial auto insurance
This is basic insurance if we use a company car because personal insurance will not provide coverage for our vehicle in case of use for business purposes. These coverages are between $150 and $186 per month.
Commercial Property Insurance
This type of insurance will be necessary if we have a business located away from home or if we carry a lot of inventory. This way, we will be able to protect ourselves against theft or property damage caused by fire or natural disasters, and it will allow us to have coverage for our tools and commercial equipment when they are on our property.
If we do not have a large inventory of expensive products or equipment, this type of insurance will not be necessary. But, in all cases, we must consider each situation uniquely to determine the best coverage for us.
Workers’ compensation insurance will be necessary for most states if we have employees. This will provide reimbursement for lost wages and medical expenses, as well as protect against certain lawsuits for injured employees.
Tools and Equipment Insurance
Liability coverage will not cover equipment and tools if stolen or suffered premature damage. If we carry expensive tools and live in an area where theft of tools is likely to occur, it may be worthwhile to purchase this coverage to keep the tools and equipment we own safe.
Professional Liability Insurance
They are also known as errors and omissions or E&O insurance. It protects against negligence claims and is specially designed for professionals who provide advice.
This insurance does not make much sense for most companies that only perform maintenance work. However, it can be basic insurance for contractors who manage other subcontractors.
What coverage is really necessary?
Many insurance companies usually use tactics to encourage us to buy more coverage. We should always have basic coverage to protect us against all situations that could put us out of business or ruin us financially.
Usually, this type of business is ideal to have a general liability policy, which will make sense for most contractors and professional maintenance personnel. This way, in accidents such as a pipe bursting, we can have coverage that will not put us out of business.
Each case is unique, and a policy will offer the required coverage for each type of business. For this reason, it will always be basic to evaluate our particular needs and thus avoid contracting coverage that we do not need to save money.