If you're running a handyman business, here's something that might surprise you: your personal auto insurance probably won't cover you when you're driving to job sites with your truck full of tools. That's a problem, because one accident while hauling equipment could leave you personally liable for thousands in damages—or worse, wipe out your business entirely.
The good news? Commercial auto insurance for handyman businesses is specifically designed to protect you when you're using your vehicle for work. Whether you own a company truck, rent vehicles occasionally, or have employees driving their own cars to job sites, there's coverage that fits your situation. Let's break down what you need to know.
Why Your Personal Auto Policy Won't Cut It
Most personal auto insurance policies include what's called a business use exclusion. This means that if you're hauling tools, equipment, or materials to a job site and get into an accident, your personal policy can deny your claim. Even if you're just driving your personal truck with a ladder in the back on your way to fix someone's fence, that could be considered business use.
Some personal policies offer an 'Artisan Use' classification, but here's the catch: it's typically limited to occasional side work, not regular business operations. If you're running a full-time handyman business, even this limited coverage won't protect you adequately. The risk is real—using your vehicle regularly to transport work tools and materials creates commercial exposure that personal policies simply aren't designed to cover.
Think about it this way: if you cause an accident while driving to a customer's home and your personal insurer discovers you were on a business errand, they can refuse to pay. You'd be on the hook for the other driver's medical bills, vehicle repairs, lost wages, and potential lawsuit costs—all out of your own pocket.
Understanding Your Commercial Auto Coverage Options
Commercial auto insurance for handyman businesses comes in three main flavors, and you might need more than one.
Owned Auto Coverage
This is the coverage you need if your business owns or leases vehicles—like that work truck with your company name on the side. It works similarly to personal auto insurance but is designed for commercial use. You'll get liability coverage if you cause an accident, plus options for collision and comprehensive coverage to protect the vehicle itself from damage, theft, or vandalism.
For handyman businesses, owned auto coverage typically costs around $185 per month or $2,224 per year, though your actual cost will depend on factors like your driving record, the vehicle's value, your location, and the coverage limits you choose.
Hired Auto Coverage
Need to rent a truck to haul a large order of materials? That's where hired auto coverage comes in. This protects your business when you rent or lease vehicles temporarily for business purposes. If you get into an accident in that rental truck, hired auto coverage handles the liability that the rental company's insurance doesn't cover.
Non-Owned Auto Coverage
This is the coverage that catches a lot of handyman business owners off guard. If you have employees who use their personal vehicles to pick up supplies, visit job sites, or run other work-related errands, you need non-owned auto coverage. Even if you're a solo operator using your own car for business, this coverage protects your business from liability if an accident happens during a work errand.
Here's what's important to understand: hired and non-owned auto insurance only provides liability coverage. If you damage another person's vehicle or property, it covers those costs and helps pay for lawsuits. But it won't cover damage to your own vehicle—that's what your personal auto policy handles for your personal car, or your owned auto coverage handles for business vehicles.
How Much Liability Coverage Do You Really Need?
Every state sets minimum liability limits for commercial auto insurance, but here's the thing: those minimums often aren't enough to protect your business. For example, California requires $30,000 per person for bodily injury and $60,000 per accident. Sounds like a lot, right? But consider this scenario: you cause an accident that seriously injures someone, and their medical bills hit $100,000. You'd be personally responsible for that extra $70,000.
Most insurance experts recommend higher limits—typically $500,000 to $1,000,000 in liability coverage. Yes, it costs more upfront, but it's far cheaper than risking your business and personal assets in a serious accident. Think about what you're protecting: your business reputation, your equipment, your income, and potentially your personal savings and home if someone sues you.
Some clients may also require you to carry specific insurance limits before they'll hire you, especially for larger commercial jobs. Having adequate coverage can actually help you win more business.
Getting the Right Coverage for Your Business
The best approach is to bundle your commercial auto insurance with your other business policies. Many handyman businesses add hired and non-owned auto coverage as an endorsement to their general liability insurance, which often saves money compared to buying separate policies. This bundling approach, sometimes called a Business Owner's Policy (BOP), can give you comprehensive protection at a better price.
When shopping for coverage, be transparent with your insurance agent about how you use vehicles in your business. Tell them about any employees who might drive for work, how often you rent trucks, what kind of tools and equipment you transport, and where you typically work. The more accurate information you provide, the better they can match you with the right coverage at the best price.
Don't forget to review your coverage annually. As your business grows—maybe you buy another truck, hire employees, or expand your service area—your insurance needs will change too. A quick annual review ensures you're not paying for coverage you don't need or, worse, missing coverage that could save your business after an accident.
Commercial auto insurance might feel like just another business expense, but it's really an investment in your business's survival. One serious accident without proper coverage could end everything you've built. Take the time to get it right, and you'll have peace of mind every time you load up your truck and head to the next job.
