As a handyman, you know how important it is to have the right tools for the job: a selection of screwdrivers and drill bits, a sturdy ladder, a good pair of work gloves….
But there’s one more important thing you need that you can’t find in a hardware store: the right handyman insurance.
While there aren’t any policies specifically labeled “handyman insurance,” there are certain types of coverage that no handyman should be without. In this article, we’ll talk about the different types of small business insurance you need as a handyman as well as how to use your coverage to increase your clients’ trust.
Handyman Insurance
As a handyman, you can do a little bit of everything. But the more expansive your services list is, the more exposure you have to risk.
Your clients put a lot of trust in you to repair, upgrade, or renovate their homes and businesses. You can protect them (and your own business) by having the right types of insurance in place.
General Liability Insurance
General liability coverage is the bare minimum of insurance for any business. You can purchase it on its own, but you generally get better savings (and better protection) when you get it as part of a Business Owner’s Policy or a Package Policy.
General Liability Insurance for a handyman covers:
bodily injury to third parties,
damage to your clients’ property, and
your legal defense (including settlements) if you are sued.
Many people hear the term “general” and think that as long as they have a general liability policy, they are covered against everything. But this isn’t the case.
Commercial Property Insurance
Most handymen don’t work out of a brick and mortar location, but “property” doesn’t just mean real estate.
All the equipment you use to hang cabinets and paint walls? Those are your property. Imagine what would happen if your truck were stolen from a parking lot with all of your tools inside. Could you afford to replace it all…and not lose any business in the meantime?
If not, you need property insurance.
Commercial Auto Insurance
You’d be lost without a truck or van to haul your equipment to the work site. Have you thought about what would happen if your commercial vehicle were damaged, totaled, or even stolen?
Your personal auto insurance policy won’t cover your work vehicles, so you’ll need to get commercial auto insurance to adequately protect yourself.
Subcontractor Insurance
If you ever hire a subcontractor to help you complete a job, subcontractor insurance is a must.
Contractors and subcontractors might differ in their scope of work, but both of these professionals should have the proper insurance coverage.
Most general liability insurance doesn’t cover work performed by a subcontractor, and if they don’t carry insurance, you’ll be held responsible for any damage or loss they cause.
Of course, you should always verify that any subcontractors you hire have insurance, but it’s a good idea to make sure that subcontracted work is covered by your policy. It’s usually done by endorsement or special request.
Workers’ Compensation Insurance
Any time someone is swinging a hammer, there are risks involved. Yes, even if you’re a professional.
That’s where workers’ compensation insurance can help.
As a sole proprietor, you aren’t legally obligated to carry workers’ comp insurance, but Florida state requirements mandate that you have it if you have even a single employee. However, since your small business relies so much on keeping you (and any employees) in peak physical condition, it’s a good idea to carry it.
Workers’ compensation doesn’t just cover employees’ medical treatment, it reimburses a certain amount of their lost wages. Without workers’ comp, you would be on the hook for medical (and possibly legal) payments if an employee is injured (and decides to sue). You might think situations like this could never happen to you, but we see it all the time.
Professional Liability Insurance
Also known as errors & omissions, or E&O, professional liability insurance covers any mistakes or oversights in your work.
“But isn’t this covered in my general liability policy?” Not necessarily.
Your general liability policy covers injury and property damage to a third party, but it doesn’t necessarily cover flaws leading to trouble from your design work or your professional advice. You may wish to consider Miscellaneous Errors & Omissions coverage, depending on the type of projects you do.
For example, if a client hires you to hang their flat screen TV on the wall and it comes crashing to the ground a few weeks later, your professional liability policy will cover the costs of purchasing and re-hanging a new one.
Data Breach and Cyber Liability Insurance
Do you take credit cards or ACH payments? Don’t get too comfortable relying on any coverage provided by your processing vendor. We can promise that their “coverage” truly only protects them.
You may think you’re flying under the radar as a small business, but small businesses are the #1 preferred target for hackers and other cyber criminals. They’re betting on the fact that you don’t have security measures in place to keep them at bay, which makes your business low-hanging fruit.
Data breach and cyber liability coverage is CRITICAL for anyone accepting electronic payments of any kind.
Employment Practices Liability Insurance (EPLI)
Whether you have a team underneath you or only hire help on an as-needed basis, EPLI is something that no business should be without.
Employment Practices Liability is designed to protect you against allegations of wrongdoing as an employer, such as discrimination, harassment, wrongful termination, and more. Remember, you don’t need to be guilty of any wrongdoing. It’s the allegation that costs big dollars to defend, even if you are exonerated in the end.
Handyman Insurance Can Put Your Clients At Ease
The thought of hiring a complete stranger to come into your home is an intimidating prospect for some homeowners, so it helps if you can set their minds at ease about the quality of your work.
Aside from merely advertising that you’re “licensed and insured,” here are a few things you can do to show your clients that you’re trustworthy.
Show the Certificate of Insurance (COI)
Anyone can say they’re insured, but a COI provides proof of insurance.
Contact your insurance carrier or agent for a certificate of insurance. Give each client a copy of the document and explain it to them so they understand what coverage you have.
You can also encourage clients to contact your insurance company directly to verify your coverage. Believe it or not, some handymen have been caught forging insurance certificates.
Add Your Client To the Policy
If you’re doing a larger job, it may be worth the (minimal) cost to include your client on your current policy.
This positively proves to your client that your insurance policy is active and that they will be aware of any changes to the policy (such as lapses in coverage).
Once the project has been completed and you have been fully paid, you can have them removed from the policy.
Purchase a Commercial Bond
Commercial bonds are a lot like insurance, but they cover things that a traditional insurance policy doesn’t.
Surety bonds are temporary and project-specific, providing your clients with the assurance that, if you don’t get the job done, someone will. Fidelity bonds cover intentional acts (such as theft) that a traditional insurance policy won’t.
Discuss Work Safety With Your Client
Of course, the best way to avoid an insurance-related dispute with a customer is to prevent damage, injury, and loss in the first place.
Before you start a project, discuss any potential hazards with your client and develop a plan to lessen your risk. For example, pets, small children, and expensive items might be kept away from the job site to minimize the risks they pose to you (or you to them).
Conclusion
Carrying the right handyman insurance policies isn’t just a good idea to protect your assets, it can help you communicate your professionalism to clients.
If you’re not sure whether your current network of policies is providing you with adequate coverage, speak with an independent insurance agent to see what other policies they recommend. No one ever sees an insurance claim coming; protect yourself now before it’s too late.
Harry Levine Insurance takes pride in being one of Orlando’s premiere insurance agencies for more than 30 years. Whether you’re gathering quotes for handyman insurance costs or need help navigating the claims process, we will use our commercial insurance knowledge and experience to create a custom insurance profile that effectively manages risk without breaking your budget.
As a handyman, you’re always working for someone else. Let us work for you and create a policy that fits your business structure. Call now for a free insurance quote or to discuss what options are best for you.
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