What Types of Insurance Are Available For Your Handyman Business?
by Dmitri Kara
Maintenance and repair services deliver a fast and professional solution for homeowners, tenants and landlords in need of tradesmen skills and know-how. But because accidents or mistakes happen, regardless of the skill level of the handyman, he must protect himself with appropriate liability insurance.
- Public liability insurance
- Legal protection
- Business interruption
- Employers' liability
- Business equipment
- Contract works
Depending on the location where the handyman company operates, there may be additional or minimum coverages required by local or state governments. These may be above and beyond the scope of this article such as (but not limited to) workmen's compensation and mandated employee benefits such as sick leave or health insurance.
Be sure to check local and state agencies to be sure you are running a legal business.
Public liability insurance
This type of legal umbrella provides coverage against significant lawsuits. Depending on how big the handyman company is and of course the various handyman services offered, it could literally be a lifesaver.
Public liability insurance is of great importance to professional handymen and property maintenance tradesmen. It protects the company in case a client is injured or if client's property is damaged, because of the handyman services provided. It is mandatory for handy man companies to insure against lawsuits over accidental acts of misguided or wrong judgment. General liability insurance could ensure a great extent of lawsuit protection.
It can cover subsequent legal expenses or compensation claims. It is crucial for all handymen companies who interact with clients on a daily basis.
Handymen public liability insurance typically provides protection in case of:
- Compensations for costs due to minor or fatal injuries to homeowners, renters or other members of the public This means hospital care payments and ambulance call out.
- Compensations for accidental property damage along with damage over other personal belongings such as garden decoration, fences, windows, flooring and etc.
- All legal expenses related to clients defending their claim
Legal protection insurance should be considered
Despite the most careful and cautious company management, there are still many cases where legal help is required. Your handyman company can face unexpected legal costs even if the claim is unfounded. Often such situations are included within public liability policies, but sometimes insurance companies have it as a separate product - legal protection insurance.
Legal expenses/protection insurance provides coverage for any legal costs and expenses for a wide range of legal disputes that any handyman company could find itself involved in such as:
- Employment disputes (including compensations)
- Defence of costs over prosecutions
- Disputes over property
- Representation for compliance and regulatory matters (i.e. health and safety)
- Employees extra protection coverage
- Tax investigations
- VAT appeals
Business interference (interruption) insurance
This type of company insurance is not specifically aimed at handymen companies, but it is important to mention, when it comes to running one.
In case your business has suffered and it is unable to pay tradesmen employees, trading could stop. This type of business insurance can help you get back on track.
For example, if an accident or act of nature ruined your office along with all tools and gears, you'll certainly have to cease business. If covered by business interference insurance, you could avoid going out of trade, because the business interruption coverage will cover the loss and help you get your business started again.
It has happened more than once and many handymen companies have survived because of it!
Tradesmen Employees Liability / Workmen's Compensation Insurance
Often called "EL" insurance, it ensures protection against claims from employees against the business because of on-the-job injuries or illness. Clearly only companies with more than one tradesman need this.
It is a legal requirement virtually everywhere for any business with employees, and each day without the coverage could lead to hefty fines! If the business employs many handymen, compensation insurance is an absolute must.
The best way to reduce risks over claims is proper prevention. Best health and safety practices are a great safety measure to reduce accidents and illness. That's why company management should be fully aware of industry regulations and carry out regular risk assessment for all handymen employed.
Protect your tools and other assets with proper insurance coverage
This type of coverage is meant for handymen who often leave equipment on site overnight, or tradesmen who face the risk of assets damaged, lost, destroyed or stolen. With the right cover in place, handymen can benefit the peace of mind about getting back on track as quickly as possible.
It is mandatory to understand what the company needs from an insurance product for handyman assets.
- Make sure if documents refer to exclusions and excesses. For example, your handymen tools may only be covered if there's a certain level of worksite security.
- Make sure documents feature the exact equipment value, as this could mean your business doesn't have the right level of insurance coverage in place
- If this option is the right one for your company, you'll need to add it on to your full business insurance policy.
- Check your policy documents to ensure that all handyman tools and gear in transit are fully covered.
Don't forget your service vehicles!
Absolutely all handymen use commercial vehicles in-between jobs. This means that insuring your handyman vehicle is simply a must. It should cover all risks, such as liability, accident claims and of course - the full insurance of all tradesman gear on board. Consider auto insurance across the board - collision coverage and specialty riders for high-end valuables.
Contract works insurance if you do larger, long-term jobs
It is important for tradesmen not only to have their assets and general liability covered, but also all ongoing work as well. It is best suitable for those types of building, maintenance or repair projects that proceed in phases leaving partly-completed work.
The type of coverage can pay to redo the project if it was ruined by an insured event like fire, flooding, unpredicted weather events, vandalism or theft, but it does not pay for terrorism issues.
Contract works insurance can help out with expenses over repairing or redoing a project if it's damaged or destroyed while it's in progress. It can refund all spent for labor, building materials, handymen tools or gear.
Policy details to watch out for:
- Triple check all papers. Ensure you are fully aware of any exclusions mentioned.
- If you have assets covered, careful not to underestimate the replacement value of tools and gear.
- Make your own research: What is the average professional indemnity insurance for your niche?
- If you do employ tradesmen (even in your own home) you are bound by law to take out employers' liability coverage. Failure to do so might end up with heavy fines.
Conclusion and take-aways
The risks handymen companies face are far from simple and many just can't be predicted. That's why handymen should be properly insured in order to face the many threats that lay ahead. If you want more details, it is best to consult with a professional insurance agent in order to guarantee the safety of your handyman company, tradesmen employees and of course - your business growth.
About the author: Dmitri Kara is a professional at The Fantastic Handyman Services of London.