Handyman insurance should is very straight forward. There are generally 5 types of insurance the average handyman will purchase:
- General Liability
- Workers Compensation
- Inland Marine- Tools Coverage
- Commercial Auto
- Commercial Umbrella
General Liability Coverage – This covers your business from damages that arise out of your negligence. You want to make sure you have completed and operations coverage included in this if your work were to injure others or damage the property of others. The standard in commercial insurance is 1 million dollars per occurrence and 2 million dollars aggregate (the most the insurance company will pay in 1 policy period).
2. Workers Compensation Coverage: This covers employees or uninsured subcontractors if someone is injured on the job. All states except Texas and New Jersey require this coverage. If you do not have employees you can usually exempt yourself from this coverage; however, if you subcontract work to others, they should have this coverage.
3. Inland Marine – Tools coverage: This is coverage for your equipment that travels. There is usually a limit of $2,500 per item and anything above that must be individually scheduled. The average cost of this is about 1% of the value of the tools.
4. Commercial Auto: Almost all personal insurance companies exclude coverage for income generating vehicles. If you are using your car/truck for your business and are in an accident having personal vehicle insurance, your claim can be denied. It is only a couple hundred dollars extra per year to insure yourself correctly and it is a tax write-off. There is precedence in this and it is worth the money to make sure you are insured.
5. Commercial Umbrella: This is excess coverage that lies on top of your general liability and workers compensation coverage. This is usually not necessary for the smaller handyman; however, if you are doing work for a larger commercial entity or general contractor, they may require this coverage.
Take the time to set up your insurance correctly. It will save you headaches and costs down the line. You are better to know about what you are covered for before a claim than after.