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What is locksmith insurance?

Locksmith insurance is a collection of commercial insurance coverages for businesses and contractors specializing in lock installations, maintenance and repairs, rekeying and/or emergency lockout assistance. Whether you damage someone’s property while repairing their lock or make a key duplication error, you’ll want to ensure that you’re protected from any financial or legal ramifications.

That’s why getting locksmith insurance, even if it’s the most basic coverage, is crucial.

What locksmith insurance includes

Locksmith insurance would usually cover you in the following areas:

• Commercial general liability (CGL): Also known as ‘slip-and-fall’ coverage, this is crucial coverage for any locksmith. It protects your business against claims of bodily injury or property damage to third parties. For example, if you accidentally damage a client's antique door while installing a new lock, commercial general liability can cover the repair costs. It also covers legal fees if a client sues you.
• Commercial property: This protects your physical assets, including your workshop, tools and inventory (like locks and key blanks), from insured perils such as fire, theft and vandalism. Commercial property insurance is similar to home insurance, but for businesses. Do note that if you run your business from home, your actual home insurance may not cover you (which is why you’d need this coverage).
• Professional liability: Also called errors and omissions (E&O) insurance, this will protect you from claims pertaining to professional errors or negligence, during or after your locksmithing work is done. For instance, if the lock you install ends up not working as intended, leading to a break-in, you might face legal action. Your professional liability insurance would cover the costs associated with the claim and potential lawsuit.

Recommended add-ons for locksmith insurance coverage

While the basic coverage may seem comprehensive enough, there are numerous other protections that you may want to consider, including these:

• Tools and equipment: Should your office or storage space, including all of its contents, get damaged or lost due to fire, flood, extreme weather, theft or vandalism, tools and equipment insurance would cover your repair or replacement costs. Think of this as home insurance exclusively for your work space (even if it’s part of your already insured home).
• Commercial auto: If you use a vehicle for business purposes, such as driving to client locations, you need commercial auto coverage. A personal auto policy typically won't cover accidents that happen while you're working.
• Cyber liability: If you store customer data electronically, such as names, addresses or credit card information, this coverage protects you in the event of a data breach or cyberattack.

Common types of locksmith insurance claims

Here are some examples of the types of claims locksmiths tend to file:

• Accidental damage: If you accidentally scratch a client's car door while trying to unlock it, you might be forced to pay repairing the damage. In this case, general liability insurance would have you covered.
• Equipment theft: Your expensive key-cutting machine and specialized tools are stolen from your work van overnight. Your tools and equipment coverage would reimburse you in this situation.
• Faulty installation: A security system you installed fails, leading to a burglary and a lawsuit from your client. In this case, you’d be protected by your professional liability insurance, which includes any legal fees you may incur.

How much does locksmith insurance cost?

There’s no flat rate that we can quote when it comes to locksmith insurance, given that your coverage can be as customizable as you would like. However, most basic packages (which usually just include commercial general liability) start at around $450 per year and can be as high as $950 per year, depending on the factors unique to your business.

Some of the factors that may impact your insurance premium include:

• Type of coverage: Basic policies with standard coverage will cost less than comprehensive policies with multiple add-ons.
• Coverage amount: The higher the coverage limits, the more expensive the policy.
• Business revenue and size: Your anticipated income for the year ahead, the scale of your operations and number of employees all play a role in determining your premiums. The more you earn and the bigger your business, the more you’ll end up paying in premiums.
• Location: Insurance costs can vary based on where you live and work. If the area where your workshop is located has a lot of crime, for example, then there is a higher chance that your locksmithing tools and equipment could get stolen.
• Experience level: The more experience you have under your belt, the less likely you are to make costly mistakes, and thus, the less you’ll pay in premiums.
• Claims history: If you have recently filed a claim, then there is a high chance that you’ll file another one in the future. Insurers take this into account and adjust their premiums accordingly. As you might expect, more claims in the past equal to higher premiums in the future.

How to get the cheapest locksmith insurance rates

Finding affordable locksmith insurance doesn’t mean you have to compromise on coverage. Here are some tips to get the best rates:

• Shop around: The best way to ensure you're getting a competitive rate is to compare quotes from multiple insurance providers.
• Bundle policies: Purchasing multiple insurance products (like general liability and commercial auto) from the same provider often results in a discount.
• Increase your deductible: A higher deductible – the amount you pay out-of-pocket on a claim – can lower your monthly premium.
• Maintain a good record: A track record of safe work practices and few-to-no claims can lead to lower rates over time.