A professional handyman has to be pretty adaptable! Installing a set of cabinets, repairing some drywall, painting a mailbox, realigning a garage door, pouring some concrete, sanding a porch, assembling furniture, removing a door frame, building a shelving unit, remodeling a living room, unclogging a drain, hauling some junk… it’s all part of the job. The more skills a handyman can master, the more jobs he can say yes to.
A handyman’s business insurance needs to be just as adaptable. The more jobs a handyman can take on, the more varied the risks that come with those jobs, and the handyman’s policies MUST cover all those risks in order to be effective (otherwise what’s the point of insurance?). Therefore it is crucially important that the handyman work closely with a business insurance broker to craft an insurance policy that is tailored to the handyman’s actual needs. Being “properly covered” doesn’t mean just piling on more and more insurance (with higher commissions for the broker); it means creating a set of policies that fit a client’s business risks exactly.
“Do I really need insurance?”
The first question many handymen (and other business owners) ask is, “Do I really need insurance?” A good way to answer that question is to think about the risks a handyman takes on just by doing his job, AKA the every day accidents that could result in the handyman having to shell out lots and lots (and lots) of money. A newly installed air conditioning unit could fall and injure a child. A handyman’s assistant could slip off a ladder and break his leg. The handyman could get T-boned while driving his truck to a job site. A client could trip over a peeled-up carpet and decide to sue. A whole set of new tools could be stolen from the truck. And many many more.
These sorts of accidents can happen to anybody, even the most skilled operators. They are the risks of doing business. What insurance does is transfer that risk off of the handyman’s balance sheet and onto the balance sheet of an insurance company. One single lawsuit or car accident can put even a well-established handyman out of business. One theft can set a handyman back for months. By purchasing policies designed to cover these mishaps, the handyman can sleep at night with the knowledge that no matter what goes wrong, he won’t have to pay for the damage. That is, as long as the risk is covered in the policy.
This is why it’s so crucial to work with an insurance broker who isn’t just trying to close a deal quickly for a fast buck, but instead wants to learn every facet of the handyman’s business before agreeing to write the insurance policies. The cost and scope of the insurance will depend on what kind of work the handyman does, whether he has employees, who his clients are, and how large his operation is. If the handyman does more dangerous work, the cost will be higher, but so will the coverage. All of this should be discussed before the broker even attempts to get quotes.
One added perk of insurance: Many clients require certificates of insurance before work can begin. These clients may include apartment complexes, bank-owned properties, clients asking for electrical or plumbing work, and clients who simply want to ensure that if an accident does occur on their property, the handyman will have the resources to pay for the repairs. For these clients, a handyman without insurance is simply unhireable. Therefore proper insurance coverage could lead to more (and better paying) jobs.
Remember: Even if you are very careful and diligent at job sites, accidents can still happen. Insurance protects you and your business from outcomes that are out of your control.
“What types of insurance do I need?”
The types of insurance a handyman might typically need include:
General Liability – Protects him from paying repair costs in the event that the handyman accidentally harms a customer’s home, appliances, or other property. If the customer himself is injured in an accident, this insurance can cover small medical bills regardless of who was at fault, and large medical bills if the handyman is found to be liable. Should the accident lead to a pricey lawsuit, this policy could cover all the defense costs. A General Liability policy can even pay out if there is a dispute over the handyman’s finished work – this is known as “Completed Products Coverage”. Since so much of his work is performed within a customer’s home, a professional handyman must have protection from lawsuits of all varieties. A G.L. policy provides just that, so a handyman can do his job without worrying that one mistake will cost him his business.
Coverage of tools and equipment (also known as Inland Marine ) – If his tools or equipment are stolen, damaged, or lost, this policy will cover the loss. Imagine the cost to replace an entire set of tools if they are destroyed by fire or some other accident. Inland Marine will not only pay to replace the set, but it may also cover lost income if the accident forced the handyman to suspend his operations for a time. And to top it all off, Inland Marine coverage follows the handyman wherever he takes his equipment (unlike a Commercial Property policy, which covers only equipment and property that stays in one place). Since most handymen do a lot of traveling with their tools, every piece of a handyman’s equipment should be insured with an Inland Marine policy.
Workers Comp – If the handyman has employees, this insurance is legally required. It covers medical bills, lost wages, and even death benefits if employees are injured or killed on the job. The more dangerous the work, the more expensive this policy is likely to be. But don’t take that to mean it’s a policy that can be skipped. Aside from the legal requirement, Workers Comp is an absolutely crucial policy for a handyman to carry, just for the sake of his business. Given the strenuous, physical nature of the work, the threat of accidental injury is always present. Workers Comp will not only cover the medical bills for the employees (and the owner if he wants to be included), but it also protects the owner from lawsuits.
Commercial Auto – Since being a professional handyman involves the daily operation of a work vehicle, having a strong Commercial Auto policy in place is vital. Whether driving to a job site, picking up supplies, backing into a customer’s driveway, or popping out for coffee, every moment spent on the road exposes a handyman to risk. Without a Commercial Auto policy in place, the handyman is on the hook for any harm that comes to people or property as a result of his vehicle (whether the business owner or his employees are driving). If a handyman’s truck backs into some scaffolding, gets T-boned at an intersection, rear-ends a car in traffic, or strikes a pedestrian, this crucial coverage can pay for the damages. It can cover medical bills, replacement of damages property, legal fees, and even repairs to the handyman’s own vehicle should he be hit by an uninsured driver.
The Shield
These policies combine to form a shield that protects a handyman from just about any catastrophe that could strike his business: injured workers, a car accident, a fire at the shop, theft of tools, damage to a customer’s property, a natural disaster, and even lawsuits from dissatisfied customers. This is what we call a “well-tailored” policy, rather than “one size fits all”. It doesn’t just tack on a bunch of insurance a handyman doesn’t actually need; instead it is designed specifically for a handyman, and covers exactly the risks he might face.
To compile such a perfectly tailored policy, it’s usually best to work with a business insurance broker, because brokers can search the whole market for the best deal. Brokers have access to insurance carriers that specialize in handymen and tradesmen of all kinds.
Want to find the right insurance for your business? Drop us a line! You can speak to broker, ask a question, or even suggest a future blog post.