You're running a handyman business, and every quote you get for insurance seems to offer different combinations of coverage. One agent pushes a Business Owner's Policy (BOP), another recommends buying general liability and property insurance separately, and you're left wondering which approach actually makes sense for your business. Here's the truth: for most handyman operations, a BOP is the smarter financial move—but not always. Let's break down when bundled coverage works and when you need to go the standalone route.
What's Actually in a BOP?
A Business Owner's Policy is basically a bundle deal. It combines three essential coverages into one package: general liability insurance (which protects you if a client gets injured or their property gets damaged), commercial property insurance (which covers your tools, equipment, and business property), and business interruption insurance (which replaces lost income if you can't work due to a covered event like a fire or theft).
For the average handyman business, a BOP typically provides $1 million per occurrence and $2 million aggregate in liability coverage, with a $1,000 deductible. That's solid protection for most scenarios you'll encounter—a client slipping on your drop cloth, accidentally breaking a water pipe, or having your truck broken into with thousands of dollars in tools stolen.
The Real Cost Comparison
Here's where the BOP starts looking attractive. General liability insurance alone for handyman businesses averages around $64-72 per month. A BOP that includes general liability plus commercial property and business interruption coverage runs about $90-93 per month. That means for an extra $20-30 monthly, you're adding two more types of protection that would cost significantly more if purchased separately.
One major insurer offers general liability for $48 per month, but their BOP—which includes that same general liability coverage—is only $68 per month. You're essentially getting commercial property and business interruption insurance for just $20 extra. That's a no-brainer for most handyman businesses with tools, equipment, or inventory to protect.
Do You Qualify for a BOP?
Not every handyman business can get a BOP. Insurance carriers typically limit BOPs to businesses with fewer than 100 employees and less than $5 million in annual revenue. But here's the kicker for handyman businesses: most carriers also require that individual jobs stay under $2,500 to $5,000, depending on the insurer. Once you start taking on bathroom remodels or kitchen renovations that push past those thresholds, you might not qualify.
The insurance industry considers handyman work relatively low-risk compared to specialized contracting, which is why BOPs are available in the first place. If you're doing basic repairs, installations, and maintenance work, you'll likely qualify. But if your business evolves into higher-risk specialty work—like electrical, plumbing, or structural work—insurers might push you toward standalone commercial policies instead.
When Standalone Policies Make More Sense
There are situations where splitting up your coverage into standalone policies is the smarter move. If you need higher liability limits than the standard $2 million aggregate a BOP offers, you'll need to buy additional coverage or switch to standalone general liability with higher limits. Some handyman businesses working on commercial properties or high-value residential projects require $3-5 million in coverage, which typically means going beyond what a BOP provides.
Business growth is another trigger. When you hire your first employee, you'll need workers' compensation insurance—and that's never included in a BOP. When you add a work van or truck to your operation, you'll need commercial auto insurance, which also isn't part of a BOP. These additions don't necessarily mean abandoning your BOP, but they do mean you're already buying standalone policies anyway.
If your handyman business expands into specialized services that require professional liability insurance (also called errors and omissions insurance), you'll need a standalone policy for that too. BOPs don't cover professional mistakes or bad advice—they're designed for slip-and-fall accidents and property damage, not professional negligence claims.
What BOPs Don't Cover (And What You'll Need Separately)
Even if you go with a BOP, there are gaps you'll need to fill with standalone policies. Commercial auto insurance is essential if you drive a vehicle for business purposes—your personal auto policy won't cover accidents that happen while you're driving to job sites or hauling materials. Workers' compensation is legally required in most states once you hire employees. Professional liability protects against claims that your work was substandard or caused financial harm. And if you handle valuable client property or work in clients' homes regularly, you might need inland marine insurance to cover tools and equipment while in transit.
How to Decide What's Right for Your Business
Start by asking yourself three questions. First, what's the typical value of your jobs? If most of your work stays under $2,500 per project, a BOP is probably available and cost-effective. Second, do you have business property worth protecting? If you've invested in tools, equipment, a workshop, or inventory, the property coverage in a BOP pays for itself. Third, can you afford business interruption? If losing a week or two of income due to theft, fire, or covered damage would seriously hurt your finances, business interruption coverage is worth having—and it comes standard in a BOP.
Review your coverage annually or whenever your business changes significantly. Adding a van, hiring an employee, expanding your service radius, buying expensive equipment, or taking on higher-value renovation projects are all moments to reassess whether your BOP still fits or whether it's time to explore standalone policies with higher limits or specialized coverage.
Getting Started
For most handyman businesses just starting out or operating as solo entrepreneurs with modest job sizes, a BOP delivers the best value. You get comprehensive protection at a bundled price that's hard to beat with standalone policies. But as your business grows, your insurance needs will evolve. The key is staying aware of when you outgrow your BOP's limits or eligibility requirements—and being ready to transition to standalone policies that offer the higher limits, specialized coverage, or flexibility your expanding business demands. Talk to an independent insurance agent who understands handyman businesses, get quotes for both BOP and standalone options, and make your decision based on your actual exposure and budget, not just what sounds simpler.
