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Handyman insurance: what coverage you need, explained simply

By PlainJob · Updated · 6 min read

Short answer: most handymen start with general liability insurance, which covers damage to a customer's property and injuries to other people. Add tools coverage if your tools are worth a lot, commercial auto if you drive for work, and workers' compensation once you hire, which most states require. Some states and cities require proof of insurance to register or license.

This explains the common types of coverage. It isn't insurance advice. Policies and requirements vary by state and insurer, so talk to a licensed agent about your situation.

General liability

What it covers: damage you cause to a customer's property (a dropped ladder through a window, a nicked countertop) and injuries to other people because of your work, plus legal costs if you're sued.

Why it matters: it's the policy customers, property managers and many cities ask to see. Some states, like Washington and New Jersey, require liability coverage to register as a contractor. See your state's rules.

What it doesn't cover: your own tools, your vehicle, injuries to you or your employees, or poor workmanship itself.

Tools and equipment

Often called inland marine or tools coverage. It pays to repair or replace tools that are stolen or damaged, on the job, in your truck or at home. Worth it once your tools would be painful to replace.

Commercial auto

If you drive to jobs and haul tools and materials, ask your insurer whether your personal auto policy covers business use. Many personal policies limit it, and a claim during work can be denied. Commercial auto closes that gap.

Workers' compensation

Covers medical bills and lost wages if an employee gets hurt on the job. Most states require it once you have employees, and the rules differ on how many and who counts. Some states also require it, or a formal exemption, to register as a contractor. If you're solo, check whether your state lets you cover yourself or requires an exemption certificate.

Bonds are not insurance

Some states and cities require a surety bond to license or register. A bond protects the customer if you don't finish the job or follow the law. If the bonding company pays a claim, you pay it back. It doesn't protect you the way insurance does.

Bundles

Many insurers sell a business owner's policy (BOP) that bundles general liability with property coverage, sometimes for less than buying them separately. Ask whether it fits a mobile business like yours.

How to buy without overpaying

  1. Get quotes from at least three insurers that cover contractors.
  2. Describe your work accurately, including what you won't do. Leaving out a risky service can get a claim denied.
  3. Ask what's excluded, not just what's covered.
  4. Check the limits your customers, property managers or city require before you choose.
  5. Ask for a certificate of insurance you can send customers. Many will ask.

Questions

What insurance does a handyman need?

Most start with general liability. Many add tools coverage and commercial auto, and workers' compensation is required in most states once you have employees. Some states and cities require proof of insurance to register or license.

Is handyman insurance required?

It depends on your state and city. Some require liability insurance to register or license as a contractor, and most require workers' compensation once you hire. Many customers ask for proof even where it isn't required.

Does general liability cover my tools?

Usually not. Tools are typically covered by a separate tools or inland marine policy.

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