Company insurance is intended to safeguard the financial assets of a business owner and is an important investment for a handyman business.
This article will discuss the primary insurance coverage for handyman firms, general liability insurance, as well as additional products that are appropriate for this industry.
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Handyman Business General Liability Insurance
Every firm, regardless of sector, has risks that should be insured. General liability insurance is the most frequent and comprehensive form of coverage that company owners purchase.
General liability insurance covers the following risks:
Physical harm
Damage to property
Medical expenses
Legal defence and decision
Personal and commercial harm
While general liability insurance is not legally needed for companies, operating without it is exceedingly dangerous. If your company is sued, you might face costs in the hundreds of thousands of dollars (or more). The only way to avoid this sort of catastrophe from destroying your organisation is to have an adequate general liability insurance coverage in place to assist pay for these losses.
GENERAL LIABILITY INSURANCE MAY COVER COMMON SITUATIONS FOR A HANDYMAN BUSINESS
Example 1: While working in a customer’s house, an employee drops a window, breaking it and harming their beautiful wood flooring. The expense of replacing the window and flooring would be covered by general liability insurance.
Example 2: Your customer falls over a can of paint during a discussion about an impending project and fractures his arm. If you are determined to be at fault, your general liability insurance will pay her medical fees.
Example 3: Someone overhears you and a coworker discussing a customer poorly and notifies that client, who sues you for defamation. Your legal bills and any subsequent reimbursement to the client would be covered by general liability insurance.
Of course, this is not an entire list of risks covered by a general liability insurance policy, and certain situations may result in a specific peril not being covered. To minimise coverage gaps, it’s always better to speak with your agent about the terms of your policy.
General Liability Insurance Cost
In the United States, handyman firms pay between $500 and $1,500 per year for $1 million in general liability insurance.
The cost of your coverage will be determined by a number of variables. Among them are your:
Location
Deductible
Employees’ number
Per-occurrence restriction
The overall aggregate limit
You may be able to get general liability insurance at a lower cost if you buy it as part of a business owner’s policy (BOP) rather than as a separate policy. A business interruption policy (BOP) is a more complete option that covers numerous types of coverage, such as business interruption and property insurance.
Other Types of Coverage Required by Handyman Businesses
While general liability insurance is the most crucial, there are various different types of coverage to be aware of. Other forms of insurance that all handyman firms should have include:
Insurance for Home-Based Businesses
Because an office is unneeded for this sort of company, you may opt to work from home. If your house is destroyed or a client is injured during a meeting there, you may discover that you are underinsured or uninsured under your current homes insurance coverage. Home-based business insurance fills in the gaps, protecting against losses that are not covered by a normal homeowners policy.
Home-based business insurance is often available as part of a company owner’s coverage (BOP). Some homes insurance companies provide this coverage as a rider for an extra fee (extension of coverage).
Insurance for Workers’ Compensation
If you have employees, you will most likely want this coverage since most states require employers to carry workers’ compensation insurance for both part-time and full-time employees. This coverage covers your workers if they are hurt at work or get sick as a result of a workplace accident. It covers not just an employee’s medical expenditures and missed pay if they need time off to recuperate, but also any disability or death benefits resulting from a work-related accident.
While many states enable company owners to exclude themselves, if you are intimately engaged in day-to-day business operations, consider putting yourself in your policy.
Workers’ compensation insurance is often available as a stand-alone policy.
Coverage Options for Some Handyman Businesses
In addition to the insurance listed above, your handyman company may need other forms of coverage based on particular elements of your activities. Some of them may not apply to you, so be sure to ask your agent whether policies are appropriate for your company.
Insurance for Commercial Vehicles
If you are involved in an accident while driving to and from client premises, your personal vehicle insurance coverage may cover the damage. A separate business auto insurance may assist address that coverage gap, and each state requires minimum levels of car coverage for any vehicles operating on public roads. Most of the time, those minimums only provide basic coverage, leaving you underfunded in the case of a loss, so consider obtaining limits that are higher than those needed by state law.
Commercial vehicle insurance is often available as part of a business owners’ policy (BOP) or as a separate policy.
Additional Security Measures for Your Company
Although investing in company insurance is simple (and necessary), it should not be your first line of defence. Yes, insurance will reimburse your company for cash losses incurred as a result of an occurrence, but it is much preferable to avoid losses altogether.
With this in mind, here are a few steps you can take to better secure your company:
Make use of legally binding contracts and other business agreements. (We provide free templates for several of the most often used legal forms.)
To safeguard your personal assets, form a limited liability company (LLC) or a corporation. (To discover how to incorporate an LLC or company in your state, see our step-by-step tutorials.)
Keep your company licences up to date.
Streamline the internal procedures of your company. This will eliminate unneeded variables from routine activities and establish a secure, consistent environment in which to do business.
If your company is an LLC, you should check into LLC insurance.