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What is handyman insurance?

Handyman insurance is a policy created specifically for businesses or independent contractors offering handyman services.

If you or your business handle various minor household repairs, such as plumbing, window installation or electrical work, then you likely call yourself a handyman or handywoman. If you’re uninsured – which is prevalent among those just starting out – consider purchasing insurance to protect your business’s financial well-being.

After all, mishaps happen. For instance, you might damage your client’s window or an expensive piece of furniture. If uninsured, that expense would come straight out of your pocket. In the early days of a new business, this can be debilitating since you probably won’t have too much free cash to spare. And even if you’re the best at what you do – as in, you never make a mistake – it’s still possible for something to go wrong, like a client tripping over your equipment or your equipment getting stolen altogether.

Bottom line is, though insurance may feel like just one more expense to have to deal with, the cost of a single mistake could easily sink your business. It’s better to pay a monthly premium than have to replace all your equipment or pay for a lawsuit.

What handyman insurance includes

A standard handyman insurance policy will typically include the following:

• General liability insurance: This is the backbone of any handyman insurance policy (or business policy, in general). It covers you in case of third-party injuries or property damage that occur as a result of your work. For instance, if a client trips over your tools and gets injured, general liability insurance can cover the medical expenses and potential legal fees.
• Tools and equipment coverage: Your tools are essential to your work, and if they get stolen or damaged, it can halt your business operations. Tools and equipment coverage ensures that you can quickly replace or repair your essential gear.
• Professional liability insurance: Also known as errors and omissions (E&O) insurance, this covers you if a client claims that your work was faulty or did not meet professional standards. For example, if a client alleges that improper wiring caused a fire, professional liability insurance can cover legal fees and damages.

Recommended add-ons for handyman insurance coverage

While standard policies offer essential coverage, there are several add-ons that can provide additional protection:

• Commercial auto insurance: If you use a vehicle for your work—whether it's transporting tools, visiting clients, or hauling materials—commercial auto insurance is crucial. Personal auto insurance doesn't cover vehicles used for business purposes.
• Workers' compensation insurance: If you have employees, this coverage is mandatory in many regions. It covers medical expenses and lost wages for employees who get injured on the job, protecting both your workers and your business.
• Business interruption insurance: This add-on can be a lifesaver if your business is temporarily unable to operate due to a covered event, such as a natural disaster. It covers lost income and ongoing expenses, helping you stay afloat during unexpected downtimes.

Common types of handyman insurance claims

If you’re unconvinced that insurance is for you, you might want to find out what kind of claims people in the handyman business submit. Here are some of the most common examples:

• Client or employee injury: Accidents happen, and when they do, injury claims are often the result. Whether it's a client tripping over equipment or an employee getting hurt on the job, injury claims are among the most common for handyman businesses.
• Property damage: Mistakes or accidents that result in property damage can lead to costly claims. For example, accidentally breaking a window or damaging a client's furniture while working can result in significant expenses.
• Theft: Tools and equipment are valuable and may be targeted by thieves. Whether your tools are stolen from a job site or your vehicle, theft claims can disrupt your business operations and financial stability.

How much does handyman insurance cost?

The cost of your handyman insurance will depend on a variety of factors, most of which depend on the particulars of your business.

The size of your business and the amount of revenue you generate are among the most influential factors. For instance, if you’re just a single contractor, then you shouldn’t expect to pay more than $2,500. In most cases, your amount is likely to be far below that – in the range of $500 to $1,200 per year. If you have a few employees, that premium will inch closer to or maybe even above $2,500.

There are other factors to consider in addition to your business size, including the following:

• Service type: The specific services you offer can impact your insurance costs. High-risk activities, such as electrical work or roofing, may result in higher premiums.
• Claims history: A history of frequent claims can lead to higher insurance costs, as insurers see you as a higher risk.
• Experience: The more experience as a handyman you have, the less you might end up paying for your insurance. More experience equals fewer potential blunders, and in turn, lower risk for insurers.

How to get the cheapest handyman insurance rates?

Finding the cheapest insurance rates requires a strategic approach. Here are some tips to help you secure the best deals:

• Shop around: Compare rates from multiple insurers to find the best coverage at the most affordable price. Online comparison tools can simplify this process.
• Bundle policies: Many insurers offer discounts if you bundle multiple policies together. Consider purchasing general liability, property and workers' compensation insurance from the same provider to save on premiums.
• Increase deductibles: Opting for higher deductibles can lower your premium costs. Just ensure that you can afford the deductible amount in case of a claim.

Handyman insurance in Canada: What you need to know

In Canada, handyman insurance is not only essential but also subject to specific regulations depending on the province. Here are some key points to keep in mind:

• Provincial regulations: Each province has its own regulations regarding insurance requirements for handymen. Ensure you understand the specific regulations in your area to remain compliant.
• Licensing and certification: Some provinces require handymen to hold certain licenses or certifications. Having the appropriate credentials can also help lower your insurance premiums.