Most businesses experience busy times and lulls over the course of the year. It’s important to roll with these ebbs and flows, and adjust your business’s operations and processes according to real-time needs. This is especially true for handy- and other tradespeople, who experience distinct seasonal workload changes.
One valuable adjustment? Check your insurance policies. Seasonal insurance, customized to your unique workload, scales up coverage for busy periods and scales back to save on costs during slow times (marked by tighter cash flows). For example, in the northeast, where the winter months often mean empty sales funnels, seasonal insurance can help keep a business’s cash flow on track. Read on to educate yourself on seasonal insurance for handyperson businesses, including what to keep in mind when shopping for a policy.
What is Seasonal Insurance?
Seasonal insurance is a specialized type of insurance policy designed to offer maximum protection during peak seasons and reduced coverage during lulls. Unlike standard, year-long policies, seasonal insurance provides flexibility for businesses experiencing seasonal cycles, like my own handyperson service.
Beyond their adjustability, seasonal insurance policies are largely the same as standard policies. They’re available in different coverage types, such as general liability, inland marine insurance, or income protection. If an accident occurs, the insurance policy helps cover related costs. However, when the company is performing less work, the risk exposure is reduced, allowing business owners to scale back their coverage and save costs.
I know firsthand how difficult it can be to deal with seasonal lulls, especially when your business is new. High insurance payments coupled with significantly reduced cash stores made it difficult to protect my own business. To avoid this struggle, businesses can minimize their overhead with the flexibility of seasonal policies.
Why Seasonal Insurance Matters for Handyperson Businesses
Seasonal insurance helps companies cut costs while intelligently handling risk exposure. Without it, some might be forced to overspend on handyman insurance coverage or cancel their policies. A seasonal policy protects businesses against, for example:
- Liability risks. Liability risks can include accidents to property or personal injury. For example, imagine working on a client’s porch repair. A visitor trips over your extension cord and falls, breaking their wrist. General liability insurance will cover the medical bills and possible lawsuits, protecting you from sole personal liability.
- Equipment damage or theft. Inland marine insurance protects the company’s tools and equipment from damage or theft. What if thieves target your tool trailer and make off with high-value equipment? Expensive tool replacements can eat up months worth of revenue. Inland marine insurance would replace the tools, helping companies stay on track.
- Income loss. Unexpected financial losses resulting from weather delays, injuries, or illness can be impossible for a company to absorb. Business interruption coverage helps businesses cope with such challenges.
Seasonal insurance offers special value for new handyperson businesses, who may be low on cash stores and struggle through the slower seasons.
How to Choose the Right Seasonal Insurance Policy for Your Business
As the former owner of a handyperson business, shopping for an insurance policy was never among my favorite activities, and it’s probably not one of yours, either. However, knowing what to look for in a seasonal insurance policy can help ease the process. Here are some of the top considerations when choosing the right policy:
- Policy flexibility: The core of a solid seasonal insurance policy is its flexibility. Does the insurance provider allow you to make adjustments to your coverage during off-peak months? These tweaks are key to saving money.
- Coverage options: A seasonal insurance policy is only helpful if it covers the risks you actually face. Look for a policy that provides general liability, inland marine, and income protection coverage tailored specifically to tradespeople.
- Cost-effectiveness: Your seasonal insurance policy should be affordable all year long, whether you’re ramping up coverage or reducing your limits for cost savings. But always consider the overall cost for a full year of coverage. If 12 months of seasonal insurance will cost more than 12 months of a traditional year-long policy, you’re better off with the latter.
Tips for Saving Money on Seasonal Insurance
Whether seasonal or year-round, an insurance policy should never break the bank. But we know that reducing costs without sacrificing coverage is key to surviving those more difficult times. With that in mind, the following tips will help save you money on insurance:
- Align coverage with seasonal cycles: Only pay for the coverage and limits you need during your busiest months. For example, if you’re not expecting to make a lot of money in the off-season, it might be worth significantly reducing your income protection policy limits.
- Bundle policies: Most insurers will offer significant discounts if you combine your general liability, equipment, and income protection policies into one bundle. These companies want your expanded business and will offer discounts to earn it.
- Evaluate your needs annually: As your business grows and changes, so do your insurance requirements. Take the time to regularly evaluate your policy to ensure it still supports your goals, verify rates, and update your coverage as needed.
A few words of caution, though: it may be tempting to cut costs by canceling or pausing policies, but this can be risky. Your business is always vulnerable to unexpected events that could result in significant costs. It’s safer to reduce coverage limits and lower your premiums than to leave your business completely unprotected.
Seasonal Insurance Might Be a Smart Move for You
Seasonal insurance can be a great option for some businesses, allowing them to save on premiums while maintaining coverage for liability, loss, and damage. That said, make sure any policy you select is tailored to your needs and provides the flexibility to adjust to the changing demands of your handyperson business, from peak times to quieter months.