Here's what most handyman business owners don't realize: you're probably paying more for insurance than you need to. If you've got general liability coverage and you're thinking about adding property insurance to protect your tools and workshop, there's a better way. It's called a Business Owners Policy, or BOP, and it bundles both coverages together at a discount.
But here's the catch: a BOP isn't right for every handyman business. Some companies benefit hugely from bundling. Others? They're better off with standalone policies. Let's break down when a BOP makes sense for your handyman operation and what you're actually getting for your money.
What Is a Business Owners Policy (BOP)?
Think of a BOP as the insurance industry's version of a combo meal. Instead of ordering general liability and commercial property insurance separately, you get both in one package—and you save money doing it. For handyman businesses, the average savings is between 10-15% compared to buying the policies individually.
A standard BOP for a handyman business includes three main components. First, general liability insurance covers you if a client gets injured on a job site or if you accidentally damage their property. Second, commercial property insurance protects your business assets—think your workshop, stored tools, supplies, and equipment. Third, business interruption coverage pays for lost income if your shop gets damaged and you can't work while it's being repaired.
Most BOPs for handyman businesses come with $1 million per occurrence and $2 million aggregate liability limits, plus $5,000 in business property coverage. That's a starting point—you can adjust the limits based on what you actually need.
When Does a BOP Make Sense for Handyman Businesses?
A BOP is perfect if you have a physical shop or office location. Maybe you rent a workspace where you store equipment, meet with clients, or do small repairs. That's exactly the scenario where commercial property coverage shines. If a fire damages your shop or someone breaks in and steals your table saw, your BOP's property coverage handles the replacement costs.
It's also worth considering if you're already planning to buy both general liability and property insurance. Why pay $104 per month for general liability alone when you can add property and business interruption coverage for just $43 more? The math makes sense for most established handyman businesses.
However, there are situations where a BOP might not be your best option. If you're a solo handyman who works entirely out of your truck with minimal equipment, you probably don't need commercial property coverage for a physical location. You'd be paying for protection you don't use. In that case, general liability plus a tools and equipment policy (also called inland marine insurance) makes more sense.
Understanding Revenue Limits and Eligibility
Here's something that surprises people: not every handyman business qualifies for a BOP. Insurers designed these policies for small, low-risk businesses, which means there are some guardrails.
Most insurance companies cap BOP eligibility at less than $5 million in annual revenue, though some insurers set the limit as low as $1 million while others go as high as $10 million. You'll also need fewer than 100 employees to qualify—though let's be honest, most handyman operations aren't anywhere close to that threshold.
The industry classification matters too. Insurance companies consider handyman work relatively low-risk compared to specialized contracting like roofing or electrical work. That's actually good news—it means you're more likely to qualify for a BOP and get favorable rates. However, if you start taking on higher-risk projects or specialized work outside typical handyman services, insurers might push you toward commercial contractor policies instead.
What's Typically Excluded from a BOP?
This is important: a BOP doesn't cover everything. The commercial property portion typically protects assets at a fixed location—your shop, office, or warehouse. It doesn't cover tools and equipment you regularly transport between job sites. That's a huge gap for many handyman businesses.
Let's say you load your truck with a drill, circular saw, and ladder every morning and drive to client homes. If those tools are stolen from your truck overnight or damaged on a job site, your BOP's standard property coverage won't help. You need separate inland marine insurance (sometimes called tools and equipment coverage) to protect mobile assets.
BOPs also don't include workers' compensation insurance. If you have employees—even one part-time helper—most states legally require workers' comp coverage. You'll need to purchase that separately. A complete insurance package for handyman businesses with employees typically includes a BOP, workers' compensation, and professional liability, running about $511 monthly or $6,129 annually.
Another common exclusion: commercial auto coverage. If you use your personal vehicle for business and you get into an accident while driving to a job, your personal auto insurance might deny the claim. You need commercial auto insurance to cover vehicle use for business purposes.
What Does a BOP Cost for Handyman Businesses?
BOP costs for handyman businesses average about $363 per month, or roughly $4,353 annually. But that number varies wildly based on where you're located and what coverage limits you choose. On the low end, you might pay $226 monthly. On the high end, expect up to $636 per month.
Location makes a big difference. Handyman businesses in North Dakota pay an average of $311 monthly, while those in Louisiana pay $423 for similar coverage. If you're in California, expect around $408 monthly. New York runs about $422. The variation comes down to local construction costs, lawsuit frequency, and state insurance regulations.
Your claims history affects pricing too. If you've filed multiple insurance claims in the past few years, insurers see you as higher risk and charge accordingly. Clean claims history? You'll get better rates. The same goes for revenue—higher annual revenue usually means higher premiums, since you're doing more work and have more exposure to potential claims.
How to Get Started with a BOP
If you've decided a BOP makes sense for your handyman business, getting covered is straightforward. Start by inventorying your business assets. List out the value of your tools, equipment, supplies, and any furniture or fixtures in your shop. This helps you determine how much property coverage you need.
Next, think about your liability exposure. How many clients do you work with monthly? What's the typical value of the properties you work on? If you're mainly doing minor repairs in modest homes, standard $1 million limits are probably fine. If you're working in high-value properties or doing more complex projects, consider bumping up to $2 million or higher.
Shop around and get quotes from at least three insurers. Providers like biBerk and The Hartford specialize in small business coverage and often have competitive rates for handyman BOPs. Compare not just the premium but what's included—some policies have better business interruption coverage or higher property limits at similar price points.
Finally, review your coverage annually. As your business grows, your insurance needs change. Maybe you've added more tools, hired an employee, or started taking on bigger projects. Your BOP should grow with your business—don't set it and forget it.
