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Car accidents, damage to customer property while trying to unlock it, and in rare cases, bodily injuries are some of the risks that locksmiths face on a daily basis.
With locksmith insurance, you can safeguard your business as your insurance coverage will free you from any financial liabilities that may arise as a result of accidents.
Why Do Locksmiths Need Insurance?
Though the nature of the locksmith craft is fairly simple and straightforward, as with any business, locksmiths are exposed to their own level of risk that can harm the company's financial standing should there be an accident.
For example, a client's property can get damaged beyond repair while the locksmith tries to unlock it. In such a case, the client can file a complaint and without insurance to cover the costs associated with the replacement, the contractor will have to pay for the damages themselves.
In other cases, contractors can get into a car accident while on the way to their customer's location. Without an insurance policy, the financial losses can be devastating for the business.
While in some states locksmith insurance is optional, in others locksmith contractors have to get a certain level of coverage before they can start legally operating.
What Types of Insurance Do Locksmiths Need?
Locksmith contractors should get a few different types of insurance policies to protect themselves from various risks that can negatively impact the business financially should there be an accident.
The level of cover you get will depend on the state where you're licensed to operate, the number of company cars and employees you have, the value of your tools and equipment, and more.
Below, you can read more about the recommended insurance policies locksmith should take out.
How Much Does Locksmith Insurance Cost?
The premium that you should expect to pay for locksmith insurance will depend on various factors.
On average, you can expect to pay $70 per month on general liability insurance. That totals $840 per year. With this policy, your business will be covered against property damage, third-party bodily injuries, and more.
If your business employs locksmiths, you can expect to pay an average of $275 per month on worker's compensation insurance. This adds to a total of around $3,300 per year. Such a policy will protect your employees in the event of an accident. It will pay for their lost wages, rehabilitation, medical bills, and more.
If you have company cars, you can expect to pay around $150 per month on commercial auto insurance or $1,800 per year. This policy will cover any financial losses that may result from road accidents. Additionally, your staff and any third party involved in the accident will be covered too.
Locksmiths pay an average of around $15 per month or $180 per year on contractor's tools and equipment insurance.
Should you need professional liability insurance - which is also known as E&O, you can expect to pay around $85 per month or approximately $1,000 per year. This insurance will cover you for any legal fees that you may have related to professional mistakes or negligence.
Typical Locksmith Insurance Claims
Locksmiths are traditionally small businesses with low overhead costs. Despite that, they can still be vulnerable to some risks. Most locksmith insurance claims are as a result of:
- Damage to customer property
- Vehicle accidents
- Bodily injuries
- Payment disputes with clients