Operating a successful handyman enterprise in Arkansas involves far more than just expertise at minor repairs and home improvement projects. An often overlooked but absolutely vital aspect is having proper insurance coverage to protect your business from the inherent risks faced by handymen. Even seemingly simple handyman tasks carry hazards that can lead to injuries, property damage, lawsuits and substantial financial losses if something goes awry.
As a handyman operating directly in your clients’ homes and places of business on a daily basis, accidents and mishaps can easily transpire. A slipped hammer or saw can damage a customer’s granite countertop or hardwood flooring. An errant ladder placement could lead to falling and shattering an expensive glass window or sliding door. A fall from a roof while making minor repairs can cause serious bodily harm requiring ambulance transport and hospitalization.
These examples demonstrate why Arkansas handymen need tailored insurance policies in place to buffer their small enterprise from the potentially company-ending costs that can arise from unintended accidents and mistakes. Without adequate insurance, a single mishap could spell the end of your handyman business dreams.
For handymen in Arkansas, having the proper insurance protection for handymen is crucial. This includes liability coverage for handymen to safeguard against third-party claims and workers’ comp insurance for handymen to cover employee injuries sustained while on the job.
Key Factors Influencing Insurance Costs for Handymen in Arkansas
There are several important factors that influence what handymen pay for insurance coverage in the state of Arkansas:
Number of Employees – Handymen who staff up and bring on additional employees and helpers inherently increase their exposure to injuries and workers compensation claims. The number of individuals working for your business directly impacts premiums across multiple insurance policies. Staff size is a major cost determinant.
Years in Business – The length of time a handyman has been operating their business frequently correlates to lower insurance premiums because an established history demonstrates capability to work safely and avoid frequent claims. In contrast, brand new start-up handyman businesses with no track record typically need to pay higher initial insurance rates due to the unknown risks. But costs can decrease as they gain experience.
Annual Revenue – In general, Arkansas handymen who generate higher gross annual revenues take on larger and more complex client projects. This increased exposure on bigger jobs with more opportunities for accidents and mistakes will lead to higher insurance premiums as compared to a handyman doing simpler tasks. Revenue size can dictate coverage needs.
Business Location – Handymen operating in urban regions of Arkansas such as Little Rock, Fayetteville, and Fort Smith generally see more claims activity and therefore tend to pay higher insurance premium costs than those working primarily in more rural areas of the state. Population density is a factor.
Claims History – Past insurance claims filed will drive premiums upward for the next policy term. Handymen who maintain a clean history without frequent claims generally benefit from more affordable insurance pricing. Prior losses lead to future costs.
Services Performed – Some handyman services such as electrical wiring, handyman, and roofing repairs are perceived as higher risk activities. Handymen focused on these tasks may see slightly elevated premiums as compared to those primarily performing more general lower risk services like painting, shelving installation, furniture assembly, and interior cabinetry work. But specialty trade skills also allow charging higher billable rates.
Overview of Cost Illustration for Handyman Businesses in Arkansas
Below we provide an illustrative overview of typical insurance costs for small, medium and large handyman businesses operating in Arkansas. Our goal is to furnish handymen with approximate reference points on insurance premiums so they can understand how their own current rates compare, and identify any potential cost savings opportunities. Please note actual premiums will vary based on the unique characteristics and risk profile of each individual handyman business.
In our illustrations, we base premiums on handymen working predominantly in residential homes doing general repair tasks and minor interior remodels and upgrades. We assume they have 5+ years of experience in business and no recent claims. Arkansas handymen can use this as a benchmark of average costs, and aim to secure coverage near the low end premiums from reputable insurance carriers with the help of an agent who specializes in contractor policies. Partnering with such an expert provides access to those competitive markets.
Small Handyman Business Insurance Costs
Profile:
- $150,000 Annual Revenue
- Sole Proprietorship
- 1 Owner
- 1 Full-Time Employee
Typical Annual Premiums:
- General Liability Insurance – $2,200
- Workers Compensation Insurance – $2,100
- Contract Surety Bonds – Not required for licensing in Arkansas
Low End Premiums:
- General Liability Insurance – $800
- Workers Compensation Insurance – $1,600
- Contract Surety Bonds – Not required for licensing in Arkansas
High End Premiums:
- General Liability Insurance – $2,900
- Workers Compensation Insurance – $3,600
- Contract Surety Bonds – Not required for licensing in Arkansas
For a small Arkansas handyman business generating around $150,000 in annual revenue with 1 owner and 1 extra hire, typical insurance costs fall in the range of $2,200 annually for general liability coverage and about $2,100 for a workers compensation policy. With diligent shopping through an independent insurance agent, coverage could potentially be secured for 30% to 50% lower than those typical rates.
Medium Handyman Business Insurance Costs
Profile:
- $500,000 Annual Revenue
- LLC or S-Corp
- 1 Owner
- 3 Full-Time Employees
Typical Annual Premiums:
- General Liability Insurance – $6,100
- Workers Compensation Insurance – $6,200
- Contract Surety Bonds – Not required for licensing in Arkansas
Low End Premiums:
- General Liability Insurance – $2,100
- Workers Compensation Insurance – $4,600
- Contract Surety Bonds – Not required for licensing in Arkansas
High End Premiums:
- General Liability Insurance – $9,800
- Workers Compensation Insurance – $10,200
- Contract Surety Bonds – Not required for licensing in Arkansas
For a mid-size handyman company bringing in around $500,000 annually with 1 owner and 3 staff, average insurance costs typically fall around $6,100 for general liability and $6,200 for workers compensation. But those costs could potentially be 60% lower with a diligent independent insurance agent accessing the right carrier markets.
Large Handyman Business Insurance Costs
Profile:
- $1,000,000 Annual Revenue
- LLC or S-Corp
- 1 Owner
- 5 Full-Time Employees
Typical Annual Premiums:
- General Liability Insurance – $12,300
- Workers Compensation Insurance – $10,300
- Contract Surety Bonds – Not required for licensing in Arkansas
Low End Premiums:
- General Liability Insurance – $4,900
- Workers Compensation Insurance – $7,200
- Contract Surety Bonds – Not required for licensing in Arkansas
High End Premiums:
- General Liability Insurance – $19,600
- Workers Compensation Insurance – $15,900
- Contract Surety Bonds – Not required for licensing in Arkansas
For a larger handyman company generating $1,000,000 or more in annual revenue with 1 owner and 5 employees, average insurance premiums typically fall around $12,300 for general liability and $10,300 for workers compensation coverage. Those costs could potentially be over 35% lower through an independent agent accessing specialty markets with lower rates.
Overview of Additional Insurance Coverages and Costs
Beyond just general liability and workers compensation policies, Arkansas handymen should also consider these common supplemental insurance coverages along with approximate annual premiums:
Commercial Auto Insurance – Covers vehicles like vans, trucks, and trailers used for transporting tools and materials to job sites. Protects against liability claims if an employee causes an accident while driving for work purposes.
Typical Premium: $1,500 – $3,000 per vehicle
Inland Marine Insurance – Covers tools and equipment such as power drills, saws, ladders, scaffolding and more against theft or damage when on a job site or in transit.
Typical Premium: $500 – $2,000 per year
Commercial Property Insurance – Safeguards business properties like sheds, workshops, offices, and warehouses from damage/loss due to fire, wind, hail, vandalism and other causes.
Typical Premium: $1,000 – $5,000 per year
Employment Practices Liability – Protects against claims of discrimination, wrongful termination, sexual harassment or other employment violations.
Typical Premium: $1,000 – $5,000 depending on number of employees
Cyber Liability Insurance – Covers costs related to a data breach of sensitive customer information such as names, emails, addresses, and credit card numbers.
Typical Premium: $300 – $1,000 per year
Umbrella Liability Insurance – Provides additional liability limits above policies like general liability and auto liability. Handymen typically get $1 million in extra coverage for $500 – $1,000 per year.
Getting Multiple Quotes and Securing the Right Insurance
It is vital for Arkansas handymen to work with an independent insurance agent or broker that specializes in contractor policies and has access to top regional and national commercial insurance carriers. This enables them to shop multiple A-rated insurers to get multiple quotes.
Obtaining multiple quotes facilitates finding the optimal combination of desired coverage, sufficient limits, and competitive pricing to protect their handyman business. The market is always fluctuating, so having an advocate who can access multiple carriers and provide choices allows capitalizing on fluctuations to secure the best value tailored coverage.
An insurance expert understands gaps in standard policies and how to fill them to create a comprehensive tailored package securing all facets of the business. They can bundle policies together which frequently results in a multi-policy discount. The right agent crafts a protection portfolio specifically designed for the unique risks and exposures faced by Arkansas handymen, avoiding unnecessary coverage and minimizing premium costs.
Conclusion
Insurance coverage is an absolute must-have to properly safeguard an Arkansas handyman enterprise from the array of risks faced when constantly operating on customers’ residential and commercial properties. Partnering with an experienced independent agent or broker who offers contractor-specific expertise provides access to insurance carriers familiar with these hazards.
This facilitates crafting an efficient insurance program with adequate coverage and reasonable costs, customized to address the specific exposures and budget of any handyman business. Investing in proper insurance provides peace of mind and allows handymen to focus on growing their enterprise.