For handymen and handyman contractors, having the right insurance coverage is essential to protect your business from the various risks associated with handyman work. Even standard tasks in this field carry potential dangers that can lead to significant financial setbacks if accidents occur. For example, mishaps during repairs or installations can cause property damage, injuries can happen while using tools, and unexpected project delays can arise from equipment issues. Proper insurance policies serve as a vital safeguard, preventing these risks from threatening the stability of your business.
This guide focuses on the key insurance policies needed by handymen, outlining expected costs and offering advice on how to manage insurance expenses efficiently. Our recommendations are based on an extensive analysis of over 700 insurance quotes for handymen from top providers across the United States.
Additionally, we provide detailed resources tailored to the needs of handymen, including specific guides on General Liability Insurance for Handymen and Workers Compensation Insurance for Handymen. Moreover, we offer state-specific guides for all 50 states, ensuring that local insurance rate information and regulations are considered in our advice. These resources are designed to give handymen a thorough understanding of the insurance landscape and to help you make informed decisions about protecting your business.
Take a look at the different kinds of handymen that should carry insurance.
What Insurance Do Handymen Need?
For handymen, whether you’re a sole proprietor or managing a larger business, selecting the right insurance coverages is crucial for safeguarding your operations. Here’s a breakdown tailored for handymen at different stages of their business:
Sole Proprietors/Self-Employed Handymen:
- General Liability Insurance is fundamental. While there’s no national standard, policy limits of $1,000,000 per claim and $2,000,000 aggregate are typically adequate.
- Workers’ Compensation Insurance is generally not mandated for sole proprietors without employees. However, consider it for personal protection, as it can cover medical expenses and lost wages in case of job-related injuries.
Small Handyman Businesses (less than 5 employees):
- Incorporate all the coverages mentioned for sole proprietors.
- Add Workers’ Compensation Insurance to protect your employees.
- Consider Tool and Equipment Insurance to cover your tools and machinery.
- Commercial Auto Insurance is necessary if you use a vehicle for work.
- Property Insurance is important if you own or lease a workspace.
Medium to Large Handyman Businesses (5+ employees):
- Include all the aforementioned coverages.
- Umbrella Insurance offers extra liability protection beyond your other policies.
- Employment Practices Liability Insurance guards against employment-related claims like discrimination or wrongful termination.
- Cyber Insurance is increasingly important, especially if you handle sensitive client information.
- Errors & Omissions Insurance may be necessary if your services include specialized tasks or advisory roles.
Each handyman’s situation is unique, so it’s essential to evaluate these options based on your specific business needs and risks.
General Liability Insurance for Handymen
General Liability Insurance is crucial for handymen, providing protection in case a third party claims bodily injury or property damage resulting from your work. It provides defense and coverage for claims related to bodily injuries, property damage, personal injury, and advertising injuries caused by your business activities. It’s foundational coverage for your business, safeguarding against a range of potential liabilities.
Liability Limits for Handymen: $1 million per occurrence; $2 million aggregate. Experts usually recommend a minimum of $1 million in liability coverage. Elevating your coverage from $500,000 to $1 million increases your protection significantly while only slightly affecting your premiums.
Liability Premium for Handymen: ranges from 1.1% to 3.3% of your annual revenue.
Factors Affecting Your GL Insurance Premium:
- Revenue: Higher revenue implies more work, increasing the likelihood of claims, which leads to higher premiums.
- Policy Limits: Specific jobs may require higher coverage limits, which can increase costs. However, adjusting your rates can help mitigate these extra expenses.
- Claims History: Similar to car insurance, a history of frequent claims can lead to higher premiums. Conversely, a clean record can keep your insurance costs lower.
- Location: Stricter state regulations can lead to increased oversight, influencing premium rates.
- Services Offered: Different handyman services entail various risks, each impacting premiums in unique ways. Understanding these risks is important for accurately determining coverage costs.
Here are average General Liability premiums for handymen by state and revenues:
| State | $150K Revenue | $500K Revenue | $1M Revenue |
| California | $4,200 | $8,800 | $19,000 |
| Texas | $2,900 | $7,700 | $16,200 |
| Florida | $3,700 | $10,600 | $23,000 |
| New York | $5,200 | $14,900 | $31,300 |
| Pennsylvania | $7,000 | $16,500 | $36,400 |
| Illinois | $4,900 | $13,500 | $28,300 |
| Ohio | $2,300 | $7,100 | $14,100 |
| Georgia | $2,400 | $5,500 | $11,000 |
| North Carolina | $2,200 | $5,800 | $12,100 |
| Michigan | $2,600 | $7,400 | $15,400 |
Here are favorable General Liability premiums for handymen as well as potential savings calculated off the average premiums above:
| State | $150K Revenue | $500K Revenue | $1M Revenue | |||
| Favorable Rate | Implied Savings | Favorable Rate | Implied Savings | Favorable Rate | Implied Savings | |
| California | $1,400 | 67% | $4,600 | 48% | $11,000 | 42% |
| Texas | $1,900 | 34% | $5,300 | 31% | $11,500 | 29% |
| Florida | $2,500 | 32% | $7,200 | 32% | $15,900 | 31% |
| New York | $4,000 | 23% | $12,300 | 17% | $27,100 | 13% |
| Pennsylvania | $4,000 | 43% | $12,500 | 24% | $27,600 | 24% |
| Illinois | $2,800 | 43% | $9,100 | 33% | $19,300 | 32% |
| Ohio | $1,800 | 22% | $6,500 | 8% | $12,500 | 11% |
| Georgia | $1,600 | 33% | $3,800 | 31% | $8,700 | 21% |
| North Carolina | $1,000 | 55% | $3,200 | 45% | $6,700 | 45% |
| Michigan | $2,100 | 19% | $6,700 | 9% | $12,300 | 20% |
Workers’ Compensation Insurance
Workers’ Compensation Insurance is essential for handyman businesses with employees, primarily to cover job-related injuries or illnesses. The premium rates for this insurance are determined by the specific risks associated with the handyman’s job responsibilities, categorized into class codes by the National Council on Compensation Insurance (NCCI). Handymen predominantly fall under code 5645, and the rates typically range from $5.72 to $16.73 for every $100 of payroll. This insurance provides vital benefits such as medical care, wage replacement, and rehabilitation services for employees who suffer from work-related injuries or illnesses. Additionally, it includes death benefits in cases of fatal workplace incidents. While it’s a legal requirement in most states for businesses with employees, the specific mandates and regulations can vary depending on the location. Beyond fulfilling legal obligations, Workers’ Compensation Insurance offers critical protection for your business against potential lawsuits from employees arising from workplace injuries. For handyman businesses, this insurance is not just a matter of compliance; it plays a key role in risk management, safeguarding the well-being of your employees and the financial stability of your business.
WC Policy Limits for Handymen: typically, workers’ comp offers unlimited benefits, although this can vary according to state regulations.
WC Premium Rates for Handymen: typically between $5.72 and $16.73 per $100 of payroll.
Factors Affecting Workers’ Comp Premiums for Handymen:
- Class Codes: Based on the National Council on Compensation Insurance (NCCI) classifications, premiums are determined by the risk associated with employee roles. Handymen commonly fall under codes 5645.
- State Regulations: Each state has its own workers’ comp laws and rates, influenced by factors like the cost of living and healthcare.
- Experience Modifier: This number reflects your safety track record, starting at 1.0 and adjusting based on your history of claims. A higher number of incidents leads to increased premiums.
- Payroll Amount: Premiums are calculated using your gross payroll and can increase with higher payroll figures.
Most and least expensive states for Handyman Workers Compensation Insurance:
| State | Premium per $100K Payroll |
| Georgia | $28,470 |
| Illinois | $19,230 |
| Louisiana | $17,760 |
| Connecticut | $17,170 |
| New Jersey | $17,090 |
| State | Premium per $100K Payroll |
| North Dakota | $3,510 |
| Wyoming | $4,310 |
| Texas | $4,390 |
| Ohio | $4,590 |
| Indiana | $5,560 |
Commercial Auto Insurance
Commercial Auto Insurance is crucial for handymen using vehicles for business activities, including commuting to job sites and transporting tools and equipment. This insurance not only covers collision damage to your own vehicles but also provides liability protection if your employees cause damage to other vehicles or properties while on business tasks.
Applicability: the coverage is applicable to all business-used vehicles, such as utility vans, pick-up trucks, or car trailers that transport tools and machinery. Note that personal auto policies do not cover damages incurred during business use.
Policy Limits: commonly, the limits are set at $100,000 per person, $300,000 per accident, and $100,000 for property damage. Although each state has its minimum auto insurance requirements, higher limits are often advised for comprehensive protection. For transporting expensive equipment, additional coverage may be necessary.
Typical Premium: ranges from $1,500 to $3,050 per vehicle annually.
Factors Influencing Premiums:
- Number of Vehicles: A larger fleet increases the likelihood of accidents, thereby raising premiums.
- Vehicle Type: Bigger vehicles, like vans and trucks, pose a higher risk of significant damage, leading to increased premium costs.
- Driving Records: Employees with a history of accidents or violations can result in higher insurance costs.
For handymen, securing appropriate commercial auto insurance is a key aspect of risk management, ensuring that both the vehicles and the liabilities they might incur are adequately covered. Consulting with an insurance expert can provide guidance on suitable coverage limits and additional protections based on your specific business needs.
Inland Marine (Equipment) Insurance
Inland Marine Insurance, essential for handymen, protects tools and equipment both on job sites and during transit. It’s a critical coverage considering handymen frequently transport valuable equipment to and from client locations.
Policy Limits: Typically range from $10,000 to $100,000. Note that policies often have per-item limits. For example, a policy with a $100,000 total coverage may limit claims to $5,000 per item. It’s important to ensure your policy’s limit comprehensively covers the value of your equipment, especially for items over $2,500.
Annual Premiums: usually fall between $500 and $2,000, but can be higher based on various factors.
Factors Influencing Premiums:
- Equipment Value: Higher-valued equipment can lead to higher premiums due to the increased payout risk for insurers.
- Risk Environment: Tools used in areas with higher crime rates may incur higher premiums.
Inland Marine Insurance, also known as contractors equipment insurance, is highly recommended for handymen. It provides crucial protection for hand tools, power tools, and small machinery essential for your trade, especially when working off-site. This insurance is a key component in safeguarding the assets that are vital to your handyman services.
Surety Bonds
Inland marine insurance shields your tools if they become lost, stolen, or suffer damage either in transit or while at a job site. Your tools are vital business assets directly tied to your ability to work and earn income. Replacing stolen tools out of pocket could be extremely costly without this coverage.
Bonds are essential for handymen, often required for licensing and client assurance. They guarantee your work’s quality and provide client reassurance for a set period, usually 1-2 years after project completion. If work issues arise, the bonding company covers necessary repairs up to the bond amount.
Surety Amounts: typical amounts range from $5,000 to $25,000.
Bond Premiums: Handymen pay a percentage of the bond value, generally 1-2%, not the full amount. This premium varies based on the bond amount and your credit score.
State Requirements: vary by location. For instance, California requires a $25,000 contractor bond for independent handymen.
Being bonded enhances your professional image, demonstrating reliability to clients. Compliance with bonding regulations in your operational areas is crucial for maintaining a good reputation and adhering to legal standards.
Illustrative Bond Costs by Amount and Credit Score:
| Bond Amount | Excellent Credit | Good Credit | Bad Credit |
| $5,000 | $100 – $150 | $150 – $200 | $200 – $400 |
| $10,000 | $100 – $300 | $300 – $500 | $500 – $1,000 |
| $15,000 | $150 – $400 | $400 – $750 | $750 – $1,500 |
| $20,000 | $180 – $500 | $500 – $1,000 | $1,000 – $2,000 |
| $25,000 | $200 – $500 | $500 – $1,200 | $1,200 – $2,500 |
Key factors that determine your bond premium include:
- Bond amount: The higher the bond amount, the higher the cost.
- Your credit score: A lower score might indicate a higher risk of default, leading to an increase in your premium.
Additional Insurance to Consider
Beyond the essential policies detailed above, here are additional insurance types handymen may need as their business expands:
Commercial Property Insurance
For handymen who own or lease spaces such as sheds, workshops, offices, or showrooms, this insurance is essential. It covers not just the physical structure but also the contents within, including furnishings, equipment, and inventory. Importantly for handymen, it ensures that tools and materials stored on-site are protected. This coverage complements inland marine insurance, which safeguards your equipment when it’s off-site.
Policy Limits: generally based on the value of the property being insured.
Annual Premiums: typically range from $1,000 to $5,000 or more, varying according to several factors.
Factors Influencing Premiums:
- Property Value: Higher-valued properties can lead to increased premiums due to the potential for larger claims.
- Location: Properties in areas with higher risks of natural disasters or crime usually have higher premiums.
- Construction Type: Buildings constructed with fire-resistant materials may be eligible for insurance discounts.
Umbrella Liability Insurance
Umbrella Insurance is an essential coverage for handymen, providing additional liability insurance beyond the limits of your existing policies. This type of coverage becomes increasingly important as your business grows, offering extra protection in case of catastrophic claims that exceed the limits of your general liability, auto liability, and employer’s liability policies.
Policy Limits: most umbrella policies offer an additional $1 million in coverage, with the option for higher limits, especially for larger firms.
Annual Premiums: typically range from $500 to $1,000 or more for an extra $1 million in protection. The cost may be higher for businesses considered high-risk.
Factors Influencing Premium Costs:
- Business Size: Larger businesses with more significant operations usually face higher risks and potential claims, leading to increased premiums.
- Nature of Services: Engaging in specialized or more hazardous tasks can raise insurance costs.
- Geographic Location: The local laws, prevalent risks, and cost of living can affect insurance pricing.
- Claims History: A history of frequent claims can result in higher premiums for umbrella insurance.
Employment Practices Liability Insurance
Employment Practices Liability Insurance (EPLI) is a vital component of risk management for handyman businesses, ensuring protection against a broad spectrum of employment-related claims and legal challenges. This insurance is essential as small businesses, including handyman services, are often targets of claims by disgruntled employees.
Coverage: EPLI covers a range of employee claims, including discrimination (based on race, gender, disability, etc.), wrongful termination, sexual harassment, emotional distress, breach of employment contract, retaliation, wrongful discipline, denial of benefits, negligent evaluation, and invasion of privacy.
Annual Premiums: For handymen, the cost of EPLI typically ranges from $1,000 to over $5,000, depending on various factors.
Policy Limits: Generally range from $100,000 to $1 million.
Factors Affecting Premiums:
- Number of Employees: More staff increases the likelihood of employment-related claims.
- Revenue: Higher revenue levels, indicating larger payrolls, translate to increased risk exposure.
- Claims History: A history of past EPLI claims can lead to higher insurance costs.
- Industry Risk: The handyman sector typically faces lower risks compared to industries like finance.
- State Regulations: Laws specific to each state, such as wrongful termination policies, can also affect insurance costs.
Cyber Liability Insurance
Cyber Liability Insurance is increasingly important for handyman businesses that handle customer data, including addresses, emails, and payment information. This coverage is key in the event of a data breach, where sensitive information might be compromised due to cyber-attacks.
Coverage: covers expenses related to computer forensics, customer notification, credit monitoring services for affected individuals, public relations efforts, legal settlements, and regulatory fines. The financial repercussions of a data breach can be substantial, often reaching into six figures.
Annual Premiums: for small to mid-sized handyman businesses, the cost typically ranges from $300 to $1,000 or more annually.
Policy Limits: Commonly vary from $100,000 to $1 million.
Factors Influencing Premiums:
- Revenue: Businesses with higher revenues may have more customer data, increasing the risk and potential insurance costs.
- IT Infrastructure: The strength of your cybersecurity measures, like firewalls and encryption, can impact premium rates.
- Data Sensitivity: Storing highly sensitive information, such as Social Security numbers, can raise insurance costs.
- Industry Risk: The handyman sector typically has lower cyber risk compared to industries like healthcare or finance.
Total Cost of Handyman Insurance Programs
Your insurance costs will evolve as your business grows. Key factors like staff size, years in business, and revenue impact your coverage needs and premiums. Fledgling operations with few employees and equipment have modest insurance needs. But as you take on more complex projects, hire staff, accumulate assets, and generate more revenue, your policies and premiums will expand.
A major factor is your claims history. The longer you operate without claims, the more affordable your insurance. Conversely, frequent claims lead to higher premiums. Keep this in mind when evaluating your insurance needs.
Here’s a summary of sample handymen businesses, typical insurance policies, and illustrative premiums. Remember every business is unique, so consult an insurance broker familiar with your specific risks. There are carriers that specialize in contractors. Partnering with a broker grants access to suitable carriers, enabling a tailored insurance program. We strongly advise working with an expert who can access the right markets and build an insurance portfolio protecting your handyman operation.
| Busineess Type: | Coverages Included: | Total Cost of Insurance: |
| Sole Prop Handyman $150K Revenue | General Liability (GL) || $1M per occurrence / $2M total Commercial Auto || $100K/$300K/$100K Inland Marine || $10K | $5,300 |
| Handyman Business 3 Employees $500K Revenue | General Liability (GL) || $1M per occurrence / $2M total Workers’ Compensation || *Required Commercial Auto || $100K/$300K/$100K Inland Marine || $25K Bond || $25K | $25,500 |
| Handyman Business 5 Employees $1M Revenue | General Liability (GL) || $1M per occurrence / $2M total Workers’ Compensation || *Required Commercial Auto || $100K/$300K/$100K Inland Marine || $50K Bond || $25K Umbrella || $1M Commercial Property || *Varies | $47,300 |
Why Choose ContractorNerd for Your Handyman Business Insurance?
Working with ContractorNerd’s network of experts to secure quotes for handyman insurance represents an invaluable opportunity for handymen and handyman contractors. With a comprehensive understanding of the specific insurance needs of handymen, ContractorNerd offers a tailored approach to ensure your business is adequately protected against a range of risks. Their specialized expertise in navigating the complex insurance landscape provides peace of mind, knowing that your insurance coverage is as robust as it is cost-effective.
ContractorNerd’s access to leading insurance carriers, combined with their commitment to personalized service, sets them apart in the industry. Their streamlined process for obtaining quotes, flexible payment plans, and the ability to consolidate various policies cater to the unique needs and financial realities of your handyman business. Moreover, their deep knowledge of state-specific regulations and requirements ensures that your insurance solutions are not only comprehensive but also compliant with local laws.
By choosing ContractorNerd for your handyman business insurance needs, you’re not just securing a policy; you’re investing in a partnership that prioritizes the stability and growth of your business. With ContractorNerd, you gain a dedicated ally in safeguarding your livelihood, allowing you to focus on delivering quality handyman services with the assurance that your business is well-protected.