A Handyman Insurance will protect you from things like injuries or property damage that could literally put you out of business due to a lawsuit.
A handyman (also known as a jack-of-all-trades) is a person that can handle a wide range of repair or maintenance work around the household (the “odd jobs”). Insurance companies consider such a person as a small business and offer policies that cover the various aspects and exposure of the profession.
The distinction between a handyman and a contractor is that the handyman performs all the operations alone, while the contractor will hire additional people to perform the necessary operations. In some states if the total cost of the job exceeds $1,000, then the person will be automatically considered as a contractor regardless of whether he performs the operations alone or with someone else’s assistance.
An example of the wide range of services that can be covered by a handyman include the following:
(Image source: homewatchreport)
Usually a Handyman Insurance is a three part policy consisting of:
1. The Liability Part
This Liability part provides protection against lawsuits for accidents or other mishaps that arise from the business operations and it comes in two sections:
- The Operations on Premises section that covers injuries or damages during the operations on either the clients’ or the handyman’s premises.
- The Completed Operations section that covers injuries or damages incurred after the operations have been completed.
Both sections include a Tools coverage which addresses physical loss of the handyman’s portable tools and equipment. In general, this cover is for approximately $2,500. Each section can be purchased separately or in one package.
The premium of such a policy depends entirely upon the handyman’s yearly income. A new handyman is considered as having a yearly income of $0.
2. The Vehicle Part
The vehicle part covers all aspects for any vans or trucks used by the handyman to carry out his trade. The usual coverage includes body injuries and property damage, collision damage and comprehensive loss such as theft or damage from non-collision related causes.
3. The Workers’ Compensation Part
The Workers’ Compensation part covers medical costs and lost income for an employee who is injured or becomes ill during the performance of his duties. This part is mandatory if the handyman either does not have the necessary knowledge or skill to perform the required operations or cannot comply with the time constraints of the operations and has to hire additional person(s) for assistance.
Each of these parts is independent from each other and can be acquired separately, or they can be combined together in one package. If combined into one package, insurance companies call this a Business Owner’s Policy (BOP) Insurance.
Who needs Handyman Insurance?
Every person that makes his or her livelihood by being a handyman (or a handywoman) is obliged by law to be licensed and to carry a Handyman Insurance. In fact, the law also requires that the client awarding whatever repairs or maintenance jobs to a handyman, is to ask for a certificate of insurance prior to awarding the job. Privateers never do so, but should there be any problems during the activity, it can lead to a very messy situation. Therefore, it is best to be fully covered and have a Handyman Insurance in place.
Is there a difference in Handyman Insurances across the States?
The coverage level of Handyman Insurance depends upon the local legislation and which of the three parts is mandatory. Some legislations require that the handyman carries only the Liability part. This coverage is usually $1,000,000.
Other legislations make it obligatory to carry both a Liability and a Workers’ Compensation part. There is a third legislation which states that if one is not only a handyman but he or she is also a contractor, then it is mandatory to carry all three parts of the insurance cover as listed above.
So please check the legislation applicable in your State and ensure you have the appropriate cover that suits your needs.
Note: States including Arizona, California, Colorado, Nevada and New York have distinct laws which make it challenging for insurance providers to cover you for the Liability Part at a fair price. If you are to work in those areas, you may have to look for companies offering Handyman Insurances outside the jurisdiction of these legislations and verify that you are still covered when working in these States.
An example of a Certificate of Worker’s Compensation Insurance is shown below.
(Image source: docstoc)
Other factors that require a mandatory Handyman Insurance are:
- Working in apartment complexes where it is the responsibility of the complex manager and not each apartment owner to ask for the insurance before allowing any work to be done.
- Working on bank owned properties.
- Working under hourly compensation on government owned properties.
- Working on any type of job on buildings that house public venues, such as sports arenas, concert halls and the like. In fact, in these cases it is not only necessary to be fully licensed and insured, but it is also necessary to be registered in the local association.
An example of a standard handyman or contractor licence is shown below.
(Image source: handyman-pro)
How much is Handyman Insurance?
It is not such an easy question to answer and it depends on a number of factors including the State in which you operate. Since all parts of the insurance are sold separately, it is definitely advisable to do a Google search online and type in “handyman insurance quotes”, get a few quotes and start comparing the price as well as the terms and conditions. A sample of an average Handyman Insurance package would look like this:
|Insurance part||Annual premiums|
|Income level||Income level||Income level|
|$0-$75,000 per year||$75,001-$125,000 per year||$125,001-$175,000 per year|
|Operations on Premises||$294||$347||$453|
|Grand total for all||$3453||$4428||$6380|
According to the handyman’s total income and other related expenses, any combination of the above is possible; further, it depends on which part(s) of the insurance is required.
Important Note: Please note that all the rates quoted above are indicative and used only for the purposes of illustration. They are by no means accurate representation of the actual premium payable for a Handyman Insurance.
How to purchase a Handyman Insurance?
Before you sign up for a Handyman Insurance, the best thing to do is to get referrals from your other handyman friends or contractors for reputable and stable insurance companies. You should be looking for offers of bundled packages with an option to add or remove any part as and when required. As aforementioned you will need to compare rates before making a firm decision and signing on the dotted line with an insurance provider.
One more thing to check is how long will it take for your Handyman Insurance contract to become effective. Some companies require that any such policy is signed for a period of 7 to 14 days before you actually commence or resume a task / project. Other companies require that any contract is validated 24 hours prior to commencement of a project and other companies may validate a contract online within a few minutes.
You should now have the necessary information to make an informed decision before signing up for a Handyman Insurance.