What Insurance Does a Handyman Need? A Comprehensive Guide

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Imagine you’re a self-employed handyman, and you’re replacing a client’s old bathroom sink. Suddenly, the wrench slips from your hand, cracking the expensive tile floor.

Without handyman insurance, you’d need to foot the bill for the repairs. But with the right coverage, you can breathe easy knowing you don’t have to pay out of pocket.

So, what insurance does a handyman need? Here’s a guide to essential coverage options like general liability, property, and workers’ comp insurance. You’ll also get tips for landing the best deals for protecting your business.

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Why You Should Have Small Business Insurance

First, a disclaimer: While “handyman” is the most common term for home repair workers, “handywoman” and “general contractor” also fall into this category. We use the term “handyman” here, but remember that no occupation is limited by gender. Anyone can pour their heart and soul into building their business.

Even if you take pride in your work and strive to provide excellent service, running a small business comes with its fair share of risks. Having small business insurance provides a safety net if anything goes wrong. It protects you from a variety of potential financial losses. These include:

Property damage to your tools or workshop
Liability claims from dissatisfied clients
Interruptions in your business operations due to unexpected events

But insurance isn’t just about financial protection. It also contributes to the safety of your handyman operation.

Many insurance providers offer resources and incentives to help you keep a safe working environment. These include things like safety training and regular inspections—both of which help you avoid problems on the job.

By putting safety first, you reduce the risk of accidents and show your commitment to safe business practices.

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Are You Required To Have Insurance Coverage as a Handyman?

Insurance requirements depend on the scope of your work and your licensing status.

In most cases, you’re not legally required to have handyman insurance unless you’re a licensed contractor. But even if you don’t have a license, getting insurance is strongly recommended for many types of jobs. That’s because it protects both you and the client from losses.

Here are some common handyman tasks for which having insurance is particularly important:

Electrical work
Plumbing repairs
Carpentry
Remodeling
Floor installation and repair
Decks and patios
Tiling
Door and window installation
Drywall installation
Painting
Framing
Ceiling fan installation
Home security installation
Concrete work
Stonework
Gutter cleaning
General maintenance
Staining furniture

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3 Types of Insurance for the Handyman Business Owner

There are many different options when it comes to handyman insurance. Knowing the details of each one helps you make an informed decision.

One popular option is a business owner’s policy (BOP). This plan bundles several types of small business insurance into a single package. It’s designed for small and medium-sized businesses. And it’s often more affordable than buying each policy separately.

Here are the three main types of insurance typically included in a BOP for a handyman business:

General Liability Insurance

General liability insurance covers property damage and accidental injuries. Examples include:

Damaging a client’s floor while installing cabinets
A customer slipping and falling on a wet floor in your workspace or job site
Causing water damage to a client’s home during plumbing work

In these and many other cases, general liability insurance covers the costs of repair or treatment. It also helps pay for your legal expenses, judgments, and settlements if you’re sued because of an accident.

Note that employee injuries aren’t covered by general liability insurance. That’s what workers’ compensation insurance is for.

Commercial Property Insurance

This type of insurance protects your business property. This includes your tools, equipment, and workshop or office space. It covers losses due to events such as:

Fire
Theft
Vandalism
Certain natural disasters like storms and hurricanes

Business Interruption Insurance

If your handyman business has to temporarily shut down due to a covered event, business interruption insurance can help. Covered events include:

Utility interruptions like power outages or water supply disruptions
Equipment breakdowns that halt your operations
Supplier disruptions that affect your ability to get necessary materials or inventory
Government-mandated closures or evacuation orders due to emergencies
Losses due to civil unrest or riots impacting your business premises

This type of insurance provides funds to cover your lost income and ongoing expenses. These include costs like rent and utilities while your business is unable to operate.

Other Types of Handyman Insurance for Expanded Protection

While a BOP provides a solid foundation, there are other types of insurance to consider. These give your handyman business even more protection.

Here are some extra types of insurance that safeguard your small business:

Workers’ Compensation Insurance. This covers medical expenses and lost wages if an employee gets hurt on the job. Most states require workers’ comp if you have employees.
Commercial Auto Insurance. If you use a vehicle for work, this type of insurance covers damages and injuries from accidents. Personal auto insurance usually won’t cover business use.
Professional Liability Insurance. Clients may claim that your work was faulty or incomplete. Professional liabilities protect you from losses if this happens to you.
Commercial Umbrella Insurance. This provides extra coverage above your other policy limits. It kicks in if you have a major claim that exceeds your regular coverage.
Surety Bond Coverage. Some clients may require you to have a surety bond, which protects them in case you don’t do the job they paid for. This guarantees you complete the job according to the terms of your contract. It’s most common for large projects.
Key Person Insurance. If your business relies on one or a few key people, this insurance helps out if they can’t work due to illness, injury, or death.

What Does a Handyman Insurance Policy Not Cover?

While handyman insurance provides broad protection, there are some things it doesn’t cover. It’s important to be aware of these exclusions, so you’re not caught off guard.

Here are some common problems that handyman insurance usually doesn’t pay for:

Certain Types of Natural Disasters. Standard property insurance often excludes events like earthquakes and floods. If you live in an area prone to these disasters, you may need separate coverage.
Fraudulent Behavior. Insurance won’t protect you if you engage in fraud or other illegal activities. For example, if you deliberately overcharge a client or do shoddy work, you’re responsible for the consequences.
Wrongful Termination. If an employee sues you for wrongful termination, your liability insurance probably won’t apply. You need employment practices liability insurance for this type of claim.

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How Much Does Handyman Insurance Cost?

According to Insureon, BOP insurance costs an average of about $93 per month, or $1,112 per year. Keep in mind that this is just an average, and your actual costs may be higher or lower. This is especially the case if you have multiple policies.

The price of handyman insurance also varies depending on a few factors:

Business Size. If you have a lot of employees or revenue, you’ll likely pay more for insurance.
Location. Insurance rates vary by state and even by city. If you’re in an area with higher risks, like a place with frequent natural disasters, you may have higher premiums.
Types of Services. Some handyman tasks are considered higher risk and could increase your insurance costs. These include tasks like roofing or electrical work.
Coverage Limits. Higher limits mean more protection, but also higher premiums.
Claims History. If you’ve had several claims in the past, insurers may see you as a higher risk and charge more.

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4 Pro Tips for Finding the Best Self-Employed Handyman Insurance

Choosing the right handyman insurance can feel overwhelming, but it doesn’t have to be. Here are some tips to help you find the best coverage for your self-employed handyman business:

Consult With an Insurance Agent. Talk to an insurance agent who specializes in handyman insurance. They can help you understand your risks and recommend the right policies for your business.
Read the Fine Print. When you’re comparing insurance policies, read the details carefully. Look for any exclusions or limitations that could affect your coverage.
Shop Around. Don’t just go with the first insurance company you find. Get quotes from several providers to compare prices and coverage options. This helps you get the best value for your money.
Bundle Your Policies. Many insurance companies offer discounts if you bundle multiple policies together. Take advantage of this option, especially if you need a lot of extra coverage.

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Win More Jobs, Increase Your Profit, and Support Your Clients With Homeowner Financing

High insurance premiums might seem like an inconvenience. But the more business you get, the more you have to protect—so don’t be afraid to chase those numbers.

If you’re ready to expand your business, try giving clients more ways to pay. Offering financing options can help you land more jobs and boost your profits. That’s where Joist comes in.

With Joist, you can win more upsells and get paid faster by offering your customers financing options on-site. Joist works with some of the industry’s best lenders to give your clients competitive personal loans with quick funding in as early as three business days.

Offer Convenient Financing