Handyman Insurance

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by Dan Perry on April 27, 2012

If you’re thinking of starting a handyman business, you probably have several questions about handyman insurance such as “Do I need handyman insurance? What do I look for?  Where do I get it?  How much does it cost?”  These are all questions I will answer in this post.

Most articles online will tell you that you do in fact need handyman insurance.  However, I disagree in some cases such as when you are just starting out.  When I started my handyman business, I didn’t get insurance until about 4 months in.

For one, I wasn’t doing enough business to justify the expense.  Secondly, not a single customer asked me if I was insured.

Instead of  dealing with another expense while just starting out, I decided to simply be careful while performing handyman work for customers.  Since I’m just a one man band, I don’t have to worry about any employees screwing things up either.

If I was to go back and do it all over again, I still wouldn’t get insurance until my income could support it.  So, that leads us to the question…..

Do YOU need handyman insurance?

The answer to this question is going to depend on several factors.  If you answer yes to any of the following questions, it’s probably a good idea to go ahead and get it.

  1. Does your state require it?
  2. Does your target market include apartment complexes?  Eventually, you may get an apartment deal.  If you are just starting out, this is unlikely unless you are strongly targeting them.
  3. Are you planning to do any work on bank owned properties?
  4. Are you planning on getting licensed as a contractor or handyman?  I’m not currently licensed because my state doesn’t require me to be.  I just can’t do jobs over $1,000.
  5. Are you well established and can easily justify the expense?
  6. Do you where a helmet all day?

If you answer no to all of the following questions, you may to consider holding off.  Some people will say better safe than sorry.  I’m not personally big on insurance.  So If you don’t have to have it for the business you are going after (homeowners), save yourself the time and money and focus on something more important….Like your website.

What should you look for in handyman insurance?

In my state (and I’m pretty sure in most states) the standard is $1,000,000 of liability coverage for each occurrence with an aggregate of $2,000,000.  This means that the max payout for a year is 2 million.  Hopefully you won’t screw that much stuff up.  And if you do, hopefully you filed as a multiple member LLC.

There is also the option to insure your vehicle on the same plan.  I was advised by my insurance agent that this wouldn’t really make sense.  Just ask your agent and if they think this makes sense in your unique situation.

How much does it cost?

There are a lot of factors that play into this and prices will vary greatly.  The best way to make sure you aren’t paying too much is to deal with an insurance agent that you got through a referral or personally know and trust.  The agent should get quotes from 3 or 4 companies that they underwrite for so you can see a few quotes.

My insurance policy costs me about $1,000 per year for $1,000,000 of liability insurance.  Not really a big deal since I just pass this cost onto my customers.  It only adds about $1/hour to my quotes.

Where do you get it?

As with everything now, you can just go online and submit your information and get quotes from your desk at home.  I personally like to talk to a real person for this type of purchase.

I recommend asking for a referral to a good insurance agent.  Talk to other contractors or handymen and ask them which agent they used and if they like them.  I was referred to the agent I use and I’m really happy with the service and information I was provided.  It saved me a lot of time and headache trying to research everything myself.  And when I was done, I knew I made the right decision.  Well worth it.

The only reason that I eventually decided to get handyman insurance is I was meeting with a couple of apartment complexes.  I didn’t end up getting the apartment deals because it didn’t make sense long term.  But, the day after I got the insurance, I got a job for a bank owned property and they did require insurance.  Lucky me.

If you found this information useful, be sure to follow me on twitter and sign up for my RSS feed.  I’m constantly providing tips and tricks to make you a more successful handyman or service business owner.

As always, thanks for reading!

Big D.

 

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{ 4 comments… read them below or add one }

Ed May 6, 2013 at 5:05 am

Great article concerning handyman insurance. The Association of Certified Handyman Professionals – ACHP, offers its members general liability insurance through its ACHP Insurance Program. Great for the experienced and startup handyman businesses. Build your credibility and become a member.

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diana March 3, 2014 at 7:55 pm

I been reading about this association any feedbacks?

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Dan Perry March 4, 2014 at 9:01 pm

Hi Diana,

Sorry, I have no experience with this. My thoughts are that if I don’t even know what it is, then how will it build my authority?

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Ed March 16, 2014 at 10:09 am

Diana and Dan,

The Association of Certified Handyman Professionals (ACHP) is a not-for profit handyman trade organization created by the handyman for the handyman. Our members have the general skills and knowledge of the trade. We can be found at: http://www.handymanassociation.org. Feel free to contact us or call if you have any questions regarding handyman insurance, membership, our benefits, etc.

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