I am looking for insurance for a handyman repair business any ideas as to how much to carry and where to find it.
I am looking for insurance for a handyman repair business any ideas as to how much to carry and where to find it.
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Replies
Go to Erie and find out if they have an agent in your area.
Erie seems to be good for a small operation.
Jon Blakemore
RappahannockINC.com Fredericksburg, VA
Boxcar, first accept the reality that insurance does not insure you against claims that you did a less than perfect job - an insurance company will not insure the successful completion of your work. In other words, you are hired to repair/remodel a bathroom. You do the work, but in the end, there are water leaks, both incoming and outgoing, seams are improperly taped and jointed, the floor is unlevel and the tile is cracking, etc. You get the idea. Your customer sues you. Don't look to your insurance company to defend you or pay your client to have the shoddy work corrected. On the otherhand, if your shoddy work caused damage to other parts of the house (i.e., water leaks caused a ceiling downstairs to be damaged), then that might be covered.
OK? So, it would seem that you might need several types of insurance for your business: auto insurance for your truck, both liability and theft; worker's comp, for yourself and any employees (even 1 part time); fire and casualty insurance for your storeroom where tools and materials are stored when not in use; and general liability against claims arising out of your negligence.
You family auto policy won't cover a vehicle used in a business, so you need a policy for the business vehicle. Your homeowner's policy won't cover for theft of business tools and equipment and supplies, or their destruction by fire, flood or other calamity, so you need the equivalent for the business; and you health insurance policy may or may not cover you for injuries suffered as a result of employment in a business - read your policy's exclusions to determine the answer. It certainly won't cover for the injuries of any employees; you'll need a worker's comp policy for that.
And, you need a general liability policy offering you coverage for any damage caused by your negligence to the property of a third party. Sparks from your welder sets fire to your client's gold-plated McMansion - the bill lands in your lap. Better have coverage. You back your truck up in the driveway full of tools and supplies to start the job and run over and crush his prize imported one-of-a-kind bush planted just the other day - better have coverage to replace it.
Make sure you policy covers both the amount of the actual claim of damages and provides you with legal representation during the resolution of the dispute. Make sure the costs of defense are not deducted from the total amount available to settle or pay the claim but are in addition to the claim.
Be specific about who is the "Named Insured" - the person/entity to whom the policy is actually issued and the person/entity actually insured. If you have a business having its own existence (corporation, Subchapter S, LLC, etc.) it would be the Named Insured. Try also to have your name added as a Named Insured or, at least, as an "Additional Insured". That way, no disputes later on about who is covered and entitled to a defense and coverage and who is not.
You do not have to purchase all insurance policies from the same company or the same agent - shop around, you might find that certain companies are cheaper for one portion of the coverage you need than another. Of course, you'll be pressured to purchase all your insurance from the same company and especialy pressured to buy it all through the same agent - he gets a larger commission.
Try to get policies lasting one whole year as opposed to just 6 months - they're less expensive than a 6 month policy.
You don't need an agent to obtain insurance - you can contact a company who writes directly with the public if you feel secure in your knowledge and understanding of what you need. If not, rely on the broker to explain it to you and help you make those decisions. But, remember, in most instances, he's not your agent - he works for the insurance company. That is, his legal allegiance is to the insurance company unless he specifically is hired, from day one, to be solely your agent. Walk into a State Farm office, and that's a State Farm employee staring you in the face, even though he is called an agent. Walk into Joe Yifnif's Insurance Agency and Storm Door Company and you're likely looking at an independent insurance agent (he sells to any number of insurance companies) who might be a mixture of company man and your agent. Ask him exactly who he represents, who he gets paid by, and who his allegiance is to in case of a dispute. Get it in writing.
Lastly, get a book (preferably more than one) out of the library on forming your own business and securing insurance for it and read, read, read. Search the web for business help. Although much less reliable and accurate, ask your friends what they have, and what trouble they've had. Ask them, too, what they've learned from mistakes made in the past.
Good luck.
Great info, thank you.
I'm in the same boat as boxcar and am in need of insurance for a fledgling business.
Is it possible to get just a liability policy? I understand that I may need insurance on many things like my vehicle, tools, shop, etc. But I'm not deathly afraid of a claim in the $1k to $20k range. I can recover from something like that. Albeit it wouldn't be fun, but I'm confident I could dig out of that hole.
I'm worried about the $20k to the "lose your shirt" claim that would wipe out everything I have including my left one and the three kids.
Except to register a motor vehicle, nobody can force you to buy insurance (unless you live in a "progressive" state) - it's solely for your protection. You get it, or not, and in such amount as makes you able to sleep at night. If you feel comfortable being uninsured for $20k you're a better man than I, but that doesn't mean you're wrong.
You can probably buy insurance with a $20,000 deductable, but you have to have that amount in ready cash to make it worthwhile. You owe someone that much, they're going to want it now, not over time. Otherwise you'll face garnishment or seizure by the sheriff - can you do without your truck or your tools till you come up with the $20k, plus sheriff's fees, plus any additional costs. For $20k, you gotta know the other side is going to have a lawyer.
Actually, as a general rule, the cost gets less expensive the higher the limit you purchase. It's the initial nut that cost the most.
My advice here: Investigate the cost before you rule out the purchase of what might not, in the end, cost that much to make you sleep soundly at night. Or, start off small. Explore carrying a $5k deductible at first and increase it as you business becomes solvent and you become successful or continue to win lotto. Since the cost of insurance is a business expense, it comes off taxable income so the actual cost is less. I'm don't know whether a $20k settlement of a liability claim is given the same treatment - you'd better talk to an accountant or tax lawyer to get the correct answer on that one.
Griff
look in the book for an agency that advertises "Contractor Insurance"
don't deal with typical agencies that deal mostly with homeowners