As a handyman, having the proper insurance is crucial to protect yourself from liability issues that could arise on the job. However, paying for insurance can also put a strain on your business finances.
Why Handyman Insurance Is Important
Before diving into policy specifics, it’s important to understand why carrying insurance is not an optional expense for your handyman business. Accidents and errors happen, even for the most skilled professionals. Without insurance, you would be liable to pay out of pocket for any property damage, injuries, or lawsuits that occur while on a job site. Consider these risks:
- Property damage: You may accidentally break something like a window, damage floors or walls, or cause other property damage while completing a repair. Without insurance, the full cost of repairs would come out of your pocket.
- Injuries to others: There is always a risk someone could get hurt on a job site, from slips and falls to tools causing injuries. Medical bills and lost wages for the injured party would be your responsibility without coverage.
- Lawsuits: If any property damage or injuries result in a lawsuit, insurance will provide legal protection and pay legal fees and settlement costs, if needed. Being sued personally could bankrupt your business.
- Errors and omissions: What if you make a mistake in your work that causes further issues down the line, like a plumbing repair that leads to a flood? E&O insurance covers you for these types of unintentional errors.
Without handyman insurance, one accident could destroy your business financially. So before seeking the most affordable policy, understand that some coverage is necessary.
Handyman Insurance Policy Types
There are a few different types of insurance policies commonly available for handymen:
General Liability Insurance
This is the most basic and important type of coverage. General liability insurance protects you if a client or third party is injured on your job site or their property is damaged as a result of your work. It will pay medical costs, repair bills, and legal fees up to your policy limits.
Most states require a minimum of $300,000 or $500,000 in general liability coverage for businesses like handymen. However, some jobs may require higher limits, so it’s worth checking contracts and discussing with agents.
Commercial Property Insurance
If you store any tools or materials at a retail shop or warehouse between jobs, commercial property insurance covers damage to those business assets from perils like fire, theft, and natural disasters. This protects your livelihood if your supplies and equipment are harmed.
Workers’ Compensation Insurance
If you hire employees, workers’ comp coverage pays their medical bills and lost wages if they are injured on the job. Laws require this coverage for employees. As a sole proprietor, you can opt out of workers’ comp, but it may still provide benefits if needed.
Commercial Auto Insurance
If using a vehicle for business transport of tools or materials, commercial auto insurance protects you while driving for work. It can cover your vehicle, liability to others in an accident, and provide rideshare coverage if transporting clients.
Finding Affordable Handyman Quotes
Now that the basics of necessary coverage types are understood, it’s time to start shopping around and comparing quotes. Getting multiple handyman insurance estimates can help you find the most cost-effective policy for 2024. Here are some tips:
- Contact local independent agents. Explain your needs upfront to get accurate handyman quotes. Agents represent multiple insurers and may offer better deals than going direct.
- Consider specialty insurers. Companies like Handyman Pro Insurance specialize in contractor policies and understand your risks well. Their experience translates to competitively priced options.
- Look into group plans. Some industry associations provide insurance plans for member contractors at discounted group rates. The membership fee may be paid off with long-term savings.
- Check carrier reputation. Read reviews of major handyman insurers like Progressive, Travelers, and Hartford to gauge their financial strength and customer satisfaction levels.
- Ask about discounts. Inquire about multi-policy, claims-free, new business, and other discounts that could lower your premiums. Completing training may also lead to discounts.
- Evaluate deductible amounts. Opting for a higher deductible (amount you pay out of pocket on claims) lowers premiums substantially. Just ensure funds to cover it in an emergency.
Armed with this knowledge, reach out to 3-5 agents and insurers for competitive handyman quotes based on your specifics. Comparing offers line-by-line will reveal the most cost-efficient option.
Finding the Cheapest Rates in Your State
While the above strategies help save in general, handyman insurance costs vary significantly from state to state based on risk factors in each location. By understanding average premiums nationwide and the current cheapest state, you can target seeking quotes from insurers strong there for the lowest possible rates. Let’s look at state data:
- National average premium: $1,000-2,000/year according to industry experts. Rates depend greatly on individual operation specifics and claims history.
- Cheapest state in 2023: Idaho, with average handyman premiums near $750/year. Close runner-ups include Montana, Nebraska, and South Dakota.
- Most expensive state: New York tops annual rate charts near $3,000 average. New Jersey, Maryland, and Massachusetts also have very high handyman insurance costs due to legal/population density risks.
Given Idaho’s affordability lead, look for insurers like Fulfillment Fund, General Contractors Insurance, and Idaho Insurance Group offering Idaho-specific handyman policies. Ask local agents about referring you to underwriters placing business there at cheaper prices. While not feasible to relocate, quoting such insurers may still yield sizable savings.
Alternatively, operators in the highest-cost states could explore options with insurers writing policies in cheaper states to piggyback on their lower pricing models. Definitely consider this strategy if premiums are straining finances. While not a silver bullet, it illustrates thinking outside the box to creatively trim expenses.
Additional Ways to Save on Your Premium
While finding competitive quotes and targeting cheap-cost states provides solid premium footing, some handymen achieve further savings with these additional options:
Increase Deductible
As mentioned earlier, raising your deductible amount lowers what the insurer must pay out on claims. That knocks 5-15% off premiums for each $500 increase commonly. Just have deductible funds available if needed.
Form an LLC
Operating as a legal LLC business entity rather than a sole proprietor can qualify for 5-10% small business premium discounts. See a lawyer about registering affordably in your state.
Specialize Your Operations
Focusing on low-risk handyman services like electrical and carpentry over riskier plumbing jobs may get better rates. Consider specializing to fit safer insurance models.
Improve Loss Prevention
Implementing driver safety training, rigorous contracts, and equipment warranties shows insurers your commitment to quality and fewer errors/accidents. Premium credits follow.
Pay Annually Rather Than Monthly
If able, paying in full for 12-months shaves 3-5% off versus easy monthly auto-payments. Think long-term to potentially save a chunk.
Shop Every Year For Renewal Rates
Carriers raise rates each year, so checking competitors regularly ensures you don’t overpay as the market shifts. Even an incumbent may counter with lower offers.
Leveraging these multi-pronged savings tactics can amount to 20-30% lower premiums long-run versus doing just a base comparison shop. With ongoing effort, stay ahead of increases for the best insurance value.
Policy Maintenance Tips
Once your optimal handyman insurance is in place, maintaining compliance through the policy period safeguards coverage and prevents surprises down the line:
- Pay premiums promptly per payment schedules to keep policies active.
- Report any operations changes to agents which may alter risk class/cost. Things like taking on side jobs or contractors can impact coverage.
- Keep documentation like a vehicle use log in case you need to confirm business-only driving.
- Update agents with new addresses or contact info if you move locations. Policies are site-specific.
- File claims immediately if losses occur. Most have 30-day deadlines from incident dates. Know procedures.
- Ask questions if ever unsure of policy terms, limits, and clarifications. Don’t risk gaps due to misinterpretation.
- Consider professional liability add-ons as your skills/project complexity grows over time. Evolve coverage with needs.
- Inquire about renewable policy upgrades from agents each year alongside renewal quotes.
- Check insurers’ financial ratings annually online via A.M. Best to ensure ongoing carrier strength.
