Handyman Insurance: Coverage for Small Repair and Home Improvement Businesses
What insurance handymen and small home repair businesses typically carry, how licensing and bonds relate to insurance, and the exclusions to watch for.
Handymen do a little bit of everything: hanging doors, patching drywall, assembling furniture, fixing leaks, installing fixtures. That variety is great for business, but it also means a wide range of things can go wrong in a client's home. Here's how handyman insurance usually works.
Common handyman risks
- A leak from a plumbing repair damaging floors or a downstairs unit.
- Damaging a client's walls, flooring or furniture while working.
- A client tripping over tools or an extension cord.
- Theft of tools from a truck or job site.
- Accidents while driving to jobs with tools and materials.
- Injuries from ladders, power tools or lifting.
General liability
General liability is the core policy for handymen. It's designed for third-party bodily injury and property damage claims. Two details matter a lot for this trade:
- Your own work: policies generally don't pay to fix your own faulty workmanship, though they may cover resulting damage, like water damage to a ceiling caused by a faulty fitting.
- Classification: insurers classify businesses by the type of work. If you do work outside what you described, such as roofing or electrical work, a claim may not be covered. Be specific and honest about your services.
Tools and equipment
Power tools are expensive and frequently stolen from vehicles and job sites. They're often not covered by auto insurance and may have limited coverage off-premises under property policies. A tools and equipment (inland marine) policy is designed for this.
Commercial auto
If you drive a truck or van loaded with tools to jobs, check whether your personal policy covers that use. Many handymen need commercial auto insurance.
Licensing, bonds and insurance
Rules for handymen vary widely by state and sometimes by city. Some states allow unlicensed handymen to do small jobs under a dollar threshold; others require a contractor license for most paid work, and some trades like electrical and plumbing almost always require their own license. Licensing may come with a requirement to carry liability insurance or a bond.
| Insurance | Bond | |
|---|---|---|
| Protects | Your business against covered claims | The customer or state if you fail certain obligations |
| If it pays out | Insurer pays covered claims | Bond company may seek repayment from you |
Check your state's contractor licensing board before taking on larger or specialized jobs.
Workers' comp and helpers
If you bring in helpers, check your state's workers' comp rules. If you use subcontractors, collect their certificates of insurance; otherwise their accidents may end up as claims against you.
Reducing claims
- Use written estimates that define the scope of work.
- Take before-and-after photos of each job.
- Protect floors and furniture with drop cloths.
- Test plumbing work for leaks before leaving.
- Turn down jobs outside your skills, license or insurance.
Frequently asked questions
Is a bond the same as insurance?
No. A license or contractor bond generally protects the customer or the state if you fail to meet certain obligations, and the bonding company may seek repayment from you. Insurance protects your business against covered claims.
Do handymen need a license?
It depends on your state and sometimes your city, as well as the type and value of the work. Some states let handymen do small jobs without a contractor license, while others require licensing for most paid work.
Does handyman insurance cover my faulty work?
General liability typically does not pay to redo your own faulty work, but it may cover resulting damage to other property, subject to the policy terms.