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How do I know that I’m getting the proper insurance for a Handyman?

Summary: All contractors must have their liability insurance to be covered when performing a job. Handyman that are jacks of all trades, are one of them in order to be covered when performing any of the jobs included in their work descriptions

Owning a handyman business is holding a company with a very opened type of work; this involves performing different operations like electrical work, plumbing work, carpentry work, painting, repairs, or any other job, which means that a handyman that is performing several tasks is exposed to more risks.

It is essential for business owners to understand that they have to be very careful and pay attention to the details when applying for a handyman insurance quote, they have to be sure that all the jobs his company is performing are listed on the policy, only that way they are going to be included in the coverage.

This is important not just because of the liability it represents against the customers and their properties; it is also essential if there are any employees active in the field because when a workers compensation claim is made, only the jobs listed on the policy are the ones that are going to be covered. 

Some handymen may be jacks-of-all-trades, taking on any project that comes their way, and some handyman work is specialized in only one area, like installing residential doors or building sheds. With this being said, the same insurance policy is not necessarily going to be appropriate for all of them.

Every company’s insurance policy is going to have different exclusions, and it is essential to understand that some insurance policies may not cover all of the services that a handyman plans to offer. It is always best for a handyman to specify with his insurance company the job operations that he plans on performing throughout the year to provide him with the appropriate coverage and classification for his services.

A handyman who is a jack-of-all-trades does not want to be limited to light non-structural jobs that cannot exceed over $2500 in earnings. If he plans on having large jobs that are going to earn him over $2500  consisting of some structural remodeling services and possibly getting up on the roof in conjunction to the project, the handyman needs to specify this to his broker so that the appropriate operations can be classified for coverage.  Before signing the application for his policy, a handyman should be aware of the exclusions or activities not going to be covered by the policy. If he comes across an exclusion that he thinks may apply to him and will be offering services for, the handyman should point this out to his insurance company to endorse or include additional class code for that job operation.

For example, exclusions for things like water damage are common and hidden in the fine print, even on a plumber’s policy. Particularly high-risk services, like roofing or power washing, are often not covered either and must be included as an additional classification if the insured projects on offering those type of services.

For a handyman to make sure he is covered accordingly, first off, it is critical to have at least general liability coverage because while only one out of every 1600 policyholders file a claim over the course of a year, the average claim cost is over $150,000. That’s enough in order to put most handymen out of business. General liability insurance will protect you against incidents like:

Bodily injury (someone trips over your workstation and breaks their arm)

Property damage (you accidentally drop heavy equipment on a client’s marble counter causing damage)

Medical Payments (someone injures themselves at your job site and asks you to pay $5,000 in medical bills rather than suing you).

Moreover, before purchasing insurance coverage, a handyman should look at the outline of coverage to determine what is covered. The last thing a handyman wants to do is pay for insurance that doesn’t even include the main services he is offering.

Most Handymen can expect to pay between $450 to $1000 per year for general handyman liability insurance which can be around $40 – $85 per month. The premium will depend on where he lives, what type of services are offered, sales volume or gross sales, and some other factors such as subcontracting costs or having employees on the payroll. The best way for a handyman to make sure he is not paying too much and that he is being provided the best coverage is to get at least three free quotes or a tri-quote from his insurance agency. Fortunately, Farmer Brown insurance agents provide all their insurance shoppers with a tri-quote for them to compare different markets, ratings, and premiums. On average, a good A-rated admitted carrier might give a top of the general market liability insurance policy for a handyman business at about $1,000 per year for $1,000,000 of liability insurance and $2,000,000 Aggregate. That is about $83 per month. This is what a handyman who is a jack of all trades grossing over $150,000 should expect if he is looking to get business insurance with the best coverage on the market.

Unless you are a licensed contractor, insurance usually isn’t required in order to provide handyman services unless the person or owner you are providing the services for is mandating it. However, it is an excellent way to limit risks in case you damage a customer’s home. Most people will say that you should get handyman insurance no matter what service you provide. It is better to have that peace of mind of being covered in the event that something goes wrong. Some people will say better safe than sorry, but for many people just starting out, the risk may be very low, and the money would be used more effectively toward other areas of growing a business. However, it is better not to go too long or take on any electrical or plumbing jobs without general handyman insurance. It is really important because it not only protects you, but it protects your customers in the event of an accident as well as with property damage getting the right property insurance.

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