Building up a solid reputation as a handyman can take years of hard work, but this can really pay of when you have a roster of loyal clients who supply you with a steady stream of work. You may even need to grow your business and hire a few employees to help you out.
Having the right insurance in place can can help protect your business from financial disaster if, for instance, you injure someone or damage a client's property. And many homeowners will not hire a handyman without general liability insurance, so having a suitable policy in place can actually improve your business prospects as well.
What Kind of Insurance Does a Handyman Need?
While insurance needs are unique to each small business, here are some of the more common types of insurance coverages for a handyman. We've also included some examples to illustrate when a type of coverage could be useful.
1. Public Liability insurance protects your small handyman business financially if you accidentally injure a member of the public or damage their property. Public liability insurance covers legal expenses and compensation claims. Many clients will only hire a handyman who has public liability insurance—before buying a policy ask your clients how much cover they expect so you have enough in place.
- Bodily Injury: A customer trips over tools you left on the floor and breaks their hip. The client sues you for lost wages and the NHS could sue you to recoup ambulance call out charges and hospital fees.
- Property Damage: You accidentally drop a drill onto a client's tile floor, causing multiple tiles to crack. The client sues you for the repair costs.
- Product Liability: You install heavy TV on the wall. A month later, the TV falls from the wall and breaks. The client sues you for the cost of the TV and to repair the wall.
2. Employers' Liability insurance covers compensation claims by current or former employees against employee illness or injury caused by negligence through the course of their work for your business. It is required by law, under the Employers’ Liability (Compulsory Insurance) Act 1969.
- An employee is fixing a gutter for a client. The ladder you supplied him is unstable and your employee falls, injuring his back and leaving him unable to work for a period of time. He sues for lost wages.
3. Tool Cover covers the cost of replacing tools stolen from you or an employee. Tool cover can even protect tools left in a van overnight, although the premium for this will be higher than if you bring your tools inside each night. It can protect against a wide range of tools you might use as a handyman, from drills, saws, hammers, pliers and blow torches to ladders, spirit levels, lawnmowers and painting and cleaning supplies.
4. Personal Accident insurance can cover compensation for lost wages or medical expenses due to an accidental serious injury or compensation for accidental death.
- If a power saw accident causes a temporary loss of use in one hand, you can claim for lost wages through personal accident insurance.
5. Commercial Vehicle insurance protects your business financially if you or one of your employees has a road traffic accident and causes injury or damage while driving a business vehicle or while driving for business purposes. Third Party Only cover does what it says on the tin—it only covers damage to third parties, not you, your employees or your business vehicle. Third Party, Fire and Theft policies will cover third party damage as well as fire or theft of your vehicle. Only Comprehensive policies will protect you and your vehicle from injury or damage due to a road traffic accident.
- Your business van is stolen overnight.
- You have an accident at a roundabout and cause damage to another car, for which you are liable.
How do I Find the Best Handyman Insurance for Me?
When choosing a handyman insurance policy, there are a few things to keep in mind.
- Customisable cover
- Financial strength
- Customer reviews
- Cheap quotes
First of all, no two businesses are the same, so look for coverage that you can customise to your business needs.
Second, check the financial strength of an underwriter before you sign up. You can do this by looking for financial strength ratings from Fitch, Standard & Poor's. A.M. Best and Lloyd's.
Finally, price. Insurance quotes can vary drastically from one insurer to the next for essentially the same cover, so it's always a good idea to check multiple sources, for instance via a comparison site.
How Much is Insurance for a Handyman Business?
The average cost of public liability handyman insurance is around £75 a year or £9.12 a month for £2 million of cover. Adding additional coverages will increase the premium you pay. For example, adding £1,000 of tool cover typically costs an extra £60 to £65. Personal injury cover can add around £80 to your rate. If you hire any employees, you'll need to make sure they're insured as well.
The average pay for a handyman is around £26,000 a year, typically ranging from £16,000 to £36,000. Assuming a handyman works 40 hours a week, this translates into an hourly wage of around £13 per hour.
Therefore, a self-employed handyman would work for around 6 hours to pay for their public liability insurance (assuming £2 million of cover).