Locksmith Business Insurance

Every locksmith business needs insurance. Knowing which type of insurance you need and the best place to get it is the next step.

This article will cover the main types of business insurance and help you find the best locksmith business insurance.

Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.

Best Insurance for a Locksmith Business

The most common and comprehensive type of locksmith business insurance is general liability insurance. We recommend general liability insurance as your first line of defense against a variety of the most general and commonly occurring claims.

Some of the risks general liability insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

While a locksmith business isn’t legally required to carry general liability insurance, operating without it is extremely risky. If your locksmith business is sued, you could face fees totaling hundreds of thousands of dollars (or more).

Find the Right Policy at the Best Rate

Using a fully online insurance provider saves time and money and offers the most accurate quotes.

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Cost of General Liability Insurance

On average, locksmiths in America spend between $500 - $1,500 per year for $1 million in general liability coverage.

Compare the average cost of general liability insurance for a locksmith business to other professional industries using the graph below:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • Number of employees
  • Per-occurrence limit
  • General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.

A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

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Finding the most affordable premium starts with getting accurate quotes from highly rated providers.

Common Situations That General Liability Insurance May Cover for a Locksmith Business

Example 1: A customer is in your showroom looking at new locks for their home when he trips over a cord and falls into a display unit. He breaks his wrist in the fall and hits his head as well. Your general liability insurance policy will likely cover his medical costs and your legal fees if there is a lawsuit.

Example 2: You rent out basic tools to help customers who want to install their own locks. As an employee is demonstrating how to use a drill, she accidentally slips and sends the drill bit into your customer’s hand, seriously injuring them. General liability coverage will likely pay for their medical bills if you file a claim.

Example 3: While transferring a heavy inventory item from your storage unit onto the sales floor, an employee loses control of his dolly. It hits a customer’s brand-new luxury vehicle and causes extensive damage to the passenger door. Your general liability insurance policy will likely pay for any necessary repairs.

Check out our review of the Best Small Business Insurance Companies.

Other Types of Coverage Locksmith Businesses Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all locksmiths should obtain:

Commercial Auto Insurance

Making house calls is a huge part of your business and requires that you spend a good deal of time on the road. While you may use a personal vehicle for some job duties, your personal car insurance policy will not provide protection if you’re involved in a work-related accident. Commercial auto insurance is the best way to make sure that your company cars and employees are covered in the event of an accident.

Workers’ Compensation Insurance

Workers’ compensation insurance is a required coverage in most states for businesses that have employees. If one of your employees is injured while on the job, this coverage will help to cover their medical bills. Additionally, if they can’t return to work right away, they may be able to receive disability benefits.

Commercial Property Insurance

Maintaining a full inventory is important to your business. Additionally, your specialized equipment, tools, computer system, and office furniture make it possible to keep up with the demand of your customers. If any of these items are damaged in a fire or other accident, you will likely need to replace them as soon as possible. Commercial property insurance will cover the cost to repair or replace these essential business items.

Commercial Umbrella Insurance

If your primary insurance limits are exhausted by an accident claim or a lawsuit and you don’t have a backup plan, you could then be responsible for covering any remaining fees on your own. Commercial umbrella insurance is designed to step up in these situations to go beyond your primary policy limits and protect your business.

Additional Steps To Protect Your Business

Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.

Here are several things you can do to better protect your locksmith business:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
  • Stay up to date with business licensing.
  • Maintain your corporate veil.

Business Insurance Is the Best Way to Protect Your Business

If you're starting a new business, then you need business insurance. It's as simple as that. The protection offered by an LLC will protect your personal assets, but your business's assets are still open to liability in the case of a lawsuit or other loss.

Be sure that everything you've built is safe by getting business insurance.

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Locksmith Business Insurance FAQ

Can I buy business insurance online for my locksmith business?

Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.

What is included in a business owner’s policy?

A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.

What is the difference between business insurance and general liability insurance?

"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.

Do I need insurance before I start a locksmith business?

You should invest in business insurance coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it’s best to be proactive when it comes to protecting your assets. After all, you can’t buy insurance to cover a loss that has already occurred.

Will insurance protect my locksmith business from everything?

Not necessarily. Certain exceptions may be written directly into your locksmith business insurance policy, and some perils may be entirely uninsurable.

Is general liability the same as business owners?

A general liability insurance policy covers only liability losses. A business owner's policy covers both liability and property losses.

How do I choose the best general liability insurance?

The best general liability coverage for your business really depends on the amount of coverage you’re comfortable with and how often you expect to file a claim. A relatively safe business with a very low risk of accident or legal liability could opt for lower premiums with higher deductibles. 

However, if you are in an accident or injury-prone industry or are making advertising claims about the effectiveness of your service or product, you may wish to consider more extensive coverage. We recommend using a digital insurance provider like Next Insurance.

Do I need business insurance if I already have an LLC?

Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.

An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.

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