You’ve got your tools and an eye for detail, but have you got handyman insurance?
As a handyman, your day may include odd jobs, painting, electrical work, carpentry, among many other things. Basically, every day is likely to be different and every job is different depending on the specific needs of each client.
As a handyman, you are a jack of all trades, which is your biggest asset. The ability to do pretty much anything a client needs is exactly what makes you so valuable to your clients.
People are always in need of work, so there is always work to be done for you. That’s what provides such great job security for handymen. In order to have a profitable handyman business, you need to get clients, earn their trust by providing reliable, high quality work, and then grow your business through referrals.
When you do a good job for a client, they are very likely to recommend you to their friend who complains about something wrong in their house. Your name will be the first that they think of!
The last thing you need is some sort of accident that costs you and your handyman business a lot of money. And unfortunately, accidents can be very expensive.
If you were to get hurt on a job, it could also mean that you have to quit working temporarily until you recover, which means you have no money coming in for a period of time. This is why it could be a wise business decisions to consider handyman insurance.
Stick with us and we’ll dive into the difference types of insurance you may want to get, including general liability insurance and workers’ compensation insurance.
We’ll also go over how much those policies will cost you. From there, you can make a decision on what you think you can afford and what makes the most sense for your business.
How much does handyman insurance cost?
Handyman insurance cost depends on a few things, including: location, coverage limit, number of employees, type of services provided, and length of coverage. These factors help the insurance company to better understand the amount of risk associated with your business.
For instance, if you provide more dangerous services, then your insurance cost is going to be much different than a handyman who does not provide those same riskier services.
On average, you will probably pay somewhere between $360 and $1000 per year for a standard general liability insurance policy for a handyman.
Of course, you’ll want to consider your budget and how much you are able to spend on a handyman insurance policy. You want to make sure that you get what you need to cover yourself properly, but at the same time, you don’t want to overpay either.
It’s worth talking to multiple insurance companies so that you can compare rates and policies to ensure you get the appropriate handyman insurance coverage for your business.
If you are a small business just starting up, it may be hard to consider spending money on insurance that isn’t necessarily required. But, more often than not, it will pay for itself. And, once you get a steady stream of clients, there are other ways to make up for this business expense.
For instance, whatever amount you will end up paying for your handyman insurance, you can pass this expense on to your clients by just adjusting your hourly rate to compensate for the cost of your liability policy.
And that’s okay to do. It’s a pretty common business practice actually. Ultimately, the handyman insurance policy is there to protect both you and your customers so it makes sense that you both would cover the cost.
According to Home Guide, on average, a self-employed contractor handyman charges between $50 and $80 per hour for work, while a corporate handyman charges between $75 and $125 per hour.
That is taking into consideration that those handymen have insurance. For uninsured handymen or handymen in more rural areas, they charge between $35 and $65 per hour. That’s about a $15 difference per hour for the average handyman.
Based on the above information, you can see that it’s easy to pass along the cost of handyman insurance, just wrapped into your hourly rate as a handyman. And if you have adequate protection and provide a high quality service to your clients for their various work needs, then you can expect to earn a good living and enjoy a profitable business. Who knows – maybe your business will even be able to grow into a much larger business!
Do I need insurance as a handyman?
While insurance is required for a licensed contractor, it’s not usually required for a person providing handyman services. But, just because it’s not a requirement, doesn’t mean you shouldn’t have handyman insurance.
Really, you should think of handyman insurance as a way to help minimize your risk just in case you were to damage your customer’s home while providing services. Keeping your clients happy and providing top notch service is what will keep your clients calling you for continued work.
Let’s face it. Accidents can happen. They can happen, and they often do happen. And unfortunately, if you have an accident while working at a customer’s home, it can have serious consequences for you and your business.
Not only could an accident be costly to you financially, but it could also be damaging to your reputation. If your business reputation gets damage, that can be incredibly hard to recover from and could mean the end of your business altogether.
You will also find that a lot of clients may even ask you if you have insurance and want to see documentation that you are insured as well. Having insurance can provide comfort not just for you, but also for your clients. It could even be a determining factor if a client has to choose between hiring you and another handyman.
A general liability insurance policy can help to provide protection for financial and legal liabilities that you could incur due to accidents that result in bodily injury or property damage. When you are working in someone else’s home, it’s a good idea to invest in this type of business insurance.
You will likely find that even though it is an additional cost for your handyman business, having insurance will provide you with the peace of mind that you need to grow your business successfully. In fact, without handyman liability insurance, you could really beat risk for losing your business altogether.
What kind of insurance do you need for a handyman business?
Now that we’ve talked about why you need handyman insurance, let’s talk about what type of insurance you might need for your handyman business.
There are two main types of insurance policies you will want to consider for your handyman business: general liability insurance and workers compensation. Let’s go over the difference between general liability and workers’ comp policies and why you should consider purchasing one and/or both of them for your business.
General Liability Insurance
General liability insurance covers third party claims if someone gets hurt or there is damage to property when a handyman is providing services for a job. It is usually recommended that handymen get general liability coverage for their business to protect themselves as well as their clients.
A standard handyman insurance policy will include $1 million in liability coverage per claim and $2 million per year aggregate coverage.
If you are concerned that this may not be enough for you or you just want to provide maximum protection for you and your business, you might want to consider setting up an LLC to protect your personal assets.
An LLC is a business structure in which owners can’t typically be held personally responsible for business debts and liabilities. Setting up an LLC is actually a pretty simple process using an online service like ZenBusiness.
Typical coverage for a handyman under a general liability policy include:
- Bodily injury
- Property damage
- Legals fees
- Medical expenses
Below are examples of the typical areas of coverage you can expect to see under your general liability policy. It can help give you a better idea of why a general liability policy can help protect you and your business as a handyman.
Bodily Injury
A bodily injury claim could really be a simple accident. It could be something as little as leaving something out on the floor in a client’s home and someone tripping over it, falling and getting hurt. If there are any medical expenses from that injury, your client may expect you to pay the bill.
3rd Party Property Damage
If you are working in a client’s home and accidentally damage their property, like breaking a vase or lamp, the client will likely expect you to reimburse them for that item.
Legal Fees
If damage occurs to a client’s property, they make seek payment to fix the damage from you. In fact, they may file a lawsuit against you and take you to court in order to get payment. In this case, you will likely want to hire a lawyer to defend you. And unfortunately, lawyers can be quite expensive.
Medical Expenses
If you do some carpentry work for a client and leave a bit of debris behind accidentally, causing an injury to your client, that client may file a lawsuit against you for medical costs.
Workers’ Compensation
Workers’ compensation is a good idea for you to purchase if your business employees other people. In fact, most states apart from Texas require you to carry this type of insurance policy if you have employees working for you. This will vary state by state so you will need to check with your state’s regulations.
So, if you’re not a one-man shop, you’ll want to make sure and purchase workers’ compensation insurance. If you are the only employee of your business, you may still consider this type of policy because if you have an accident, it will provide coverage for you while you’re out of work. That can be a big deal if you are a full time handyman and your work is your sole source of income.
This insurance coverage will help provide protection for your business if an employee has an accidental injury while on the job. It can cover medical expenses as well as lost wages for employees who have an accident at work.
How much is workers’ comp for handymen?
The cost of workers’ compensation, like most insurance policies, depends on several factors, including: location, type of work, number of employees, and your history of claims.
On average, the median cost of workers’ compensation insurance for handymen is around $315 per month. While this will vary based on the criteria we describe below, that’s a rough estimate for most handymen. While you may be wondering if your small business can afford to pay for workers’ comp, you should consider the cost it could be to cover expenses if you are uninsured.
Location
Not all states require workers’ compensation insurance. Since states have difference requirements, the cost will vary from state to state.
Type of work
Not only does the rate vary by location, but also by the type of work. This is because each job classification has a different workers’ comp class code.
Number of employees
Depending on how many employees you have as part of your small business, you rate for workers’ comp insurance will vary. Insurance companies assess the amount of risk depending on the number of employees, and therefore the rate they will charge you to carry insurance.
History of Claims
Another factor that’s taken into consideration when determining how much workers’ compensation insurance will cost your small business is how many claims you’ve had in the past. In general, the more claims you have had, the higher you rate will be.
Hopefully you now have a better understanding of why it’s a good idea to have insurance as a handyman and what type of insurance you should have for your business. So what are you waiting for – get your business on track today!