Many people don't realize that making replacement keys and jimmying doors are only a small part of a locksmith's business. Your real specialty is security, and you often suggest security measures based on each home and business's unique needs.
Locksmith insurance works in much the same way. Every locksmith's business is slightly different and requires a slightly different business insurance plan. However, most locksmith businesses rely on these major policies.
General Liability Insurance: A Locksmith's First Line of Defense
A solid General Liability Insurance policy can protect a locksmith from third-party (non-employee) claims. Here are some examples of incidents that could lead to a General Liability claim:
- In the process of unlocking a client's car, you damage the paint.
- A customer is reaching for a product on one of the shelves in your shop when the unsecured unit topples over, injuring them.
- While installing an electronic security system in a client's home, you accidently break an expensive heirloom.
If you are sued, your General Liability Insurance can help pay for your legal costs, including…
- Attorney fees.
- Judgments, including the medical costs of injured parties.
General Liability Insurance for locksmiths protects you whether the incident happens in your shop or at another location. Generally speaking, most of a locksmith's work is done on location – whether you are responding to a client's emergency call or servicing a bank's security hardware. So it's nice to know that your General Liability coverage follows you wherever a call might take you.
Typically, locksmiths pay about $500 a year for a General Liability policy, which is about $42 a month.
Business Owner's Policy: Safeguarding a Locksmith's Tools and Equipment
Many locksmiths opt to buy a Business Owner's Policy (BOP), which combines Commercial Property Insurance and General Liability coverage. Commercial Property Insurance is essential to any locksmith business because it protects your physical assets when they're lost or damaged in a fire, theft, or windstorm.
Even if you rent your workspace, it's important to carry Commercial Property Insurance to protect the property in that space. Many lease agreements state that a landlord isn't responsible for damage done to the property inside the rented space.
Professional Liability Insurance: Helping Locksmiths Address Professional Errors
Professional Liability Insurance (sometimes called Errors and Omissions Insurance) protects locksmiths when a professional error or oversight causes someone a financial loss. For example, locksmiths often have to enter a locked vehicle to retrieve car keys. If, after forcing your way into a client's vehicle, they claim you could have done the job without force, you may face a Professional Liability lawsuit.
Professional Liability Insurance can help you pay for the legal expenses associated with these professional mistakes. While you try to work as carefully as you can, mistakes sometimes happen. Additionally, you can be sued even if there was no mistake. In this case, your Professional Liability Insurance can still help pay for your legal defense, even if the court throws out the claim.
For locksmiths, Professional Liability coverage typically costs $780 per year or $65 per month.
Commercial Auto Insurance for Locksmiths on the Go
Commercial Auto Insurance is a particularly vital part of a locksmith's insurance plan. Because of the nature of their work, locksmiths often travel from jobsite to jobsite, installing or servicing security systems or helping clients who locked their keys in the car. Some locksmiths work primarily out of a vehicle, making Commercial Auto Insurance essential.
Commercial Auto Insurance can cover any vehicle you use for work, whether it's a passenger car, a company van, or a pickup truck. This coverage can help pay for:
- Damage you cause to another vehicle and injuries the other driver suffers.
- Damage to your vehicle caused by theft, weather events, or impact with an object.
- Damage to your vehicle caused by an uninsured motorist.
While the cost of your coverage depends on the type of vehicle you need insured, our typical locksmith customer pays about $2,500 per year for Commercial Auto Insurance.