Locksmith Insurance

Business insurance helps you keep your business running by covering legal expenses, professional mistakes, and client disputes.

Why Do Locksmith Businesses Need Insurance?

Locksmith businesses need insurance to cover the inherent risks associated with their job including safety hazards, property damage, legal liabilities, and of course maintaining client trust.

For starters, many locksmiths work with mobile services meaning they come to the property or the vehicle in question using a company car and that car is often full of equipment for basic services. This means that employees face inherent risks by working in unique and often dangerous settings.

Without the right insurance, locksmith companies can be on the hook for significant losses if there is an accident or other damage and might be financially responsible for any damages resulting from a lawsuit.

Then you add the risk of liability like property damage to your vehicles or customer’s property, even claims of things like theft from the home after a locksmith works on a residential or commercial property. General liability insurance can provide protection for a locksmith company against claims of property damage, bodily injury, or even lawsuits.

It also adds credibility—many customers and clients require proof of insurance before hiring a locksmith and some states and counties require things like basic insurance or surety bonds. If you’re an independent contractor, or you have a business with several contractors under your employ, having the right insurance helps you operate confidently, knowing you’re covered if something goes wrong.

What Insurance Do Locksmith Companies Need?

Locksmith businesses need protection against common risks like errors, injuries or damage to the job site, customer vehicles, company vehicles, and offices. To protect yourself and your business, here’s a breakdown of the most important business insurance policies to consider.

General Liability Insurance

General liability insurance is the foundational insurance policy for most small businesses. It protects you from third-party claims of bodily injury, property damage, and personal injury. If someone gets hurt because of your work, general liability pays for legal fees, repairs, or medical bills.

Example: A contractor accidentally damages a nearby structure during a locksmith job.  General liability insurance can cover the cost of any repairs and any legal fees if a lawsuit follows.

Professional Liability Insurance (Errors & Omissions)

Professional liability insurance is a form of protection against errors or omissions in the work your company does. If you make a mistake that causes damage while repairing or replacing a roof, this can protect you if you are sued for damages.

Example: Your team accidentally damages a client’s window while trying to open a residential lock. A client sues. This would cover the claims against errors in your work.

The average cost of professional liability insurance is $42 per month to protect against mistakes.

Workers’ Compensation Insurance

Workers’ compensation insurance covers your employees if they get injured or become ill as a result of their job. This covers medical bills, lost wages, rehabilitation, and even death benefits. It’s also required by law in most states if you have employees.

Example: One of your employees is injured working on the side of the road to unlock a customer vehicle. Workers’ comp pays for their ER visit and covers time off while they recover.

Workers’ compensation insurance is required for locksmith businesses with employees in almost every state.

Inland Marine Insurance

This is a form of protection for tools and equipment especially when being transported to and from a job site. If you have heavy duty tools and equipment as a commercial roofer, for example, this can provide coverage against things like theft, vandalism, or loss.

Example: You are working at a job site and some of your equipment is stolen. This would provide compensation for new equipment.

The average cost of inland marine insurance for a locksmith is $23 per month.

Employee Dishonesty Insurance

This is a form of protection against losses from fraud or theft committed by your employees. If, for example, an employee driving a mobile locksmith van steals your equipment or takes money from the till, this can provide compensation.

Example: An employee steals $4,000 worth of equipment from a company van before they quit. This would help cover the cost of replacements.

Commercial Auto Insurance

If you or your employees drive for business purposes, personal auto insurance likely won’t cover accidents. Commercial auto fills that gap. This covers vehicle damage, injuries, and liability if you’re involved in an accident while driving for work.

Example: One of your employees rear-ends a car while driving to a job site in the company truck. Commercial auto covers the damages and medical costs.

Business Owner’s Policy (BOP)

A BOP bundles general liability and commercial property insurance into one policy, often at a lower cost than buying them separately. This covers property damage to your business location or equipment, along with liability protection.

Example: A fire in your office damages supplies and business records. A BOP helps you recover both the physical and financial losses.

Commercial Property Insurance

If you own or lease space for your business, this policy covers the physical building and the contents inside. Fire, vandalism, theft, weather damage, and more—anything that could physically impact your business premises or equipment stored there.

Example: A storm causes water damage to your office, ruining thousands of dollars’ worth of tools. Commercial property insurance helps you recover.

Business Personal Property (BPP) Insurance

BPP is a type of property insurance specifically for movable items like cleaning equipment, computers, and furniture used in your van or office. It covers repair or replacement of these items if they are damaged or destroyed due to fire, theft, or other covered events.

Example: A fire in your office destroys tools and supplies. BPP helps cover the cost to replace those essential business items.

Hired And Non-Owned Auto (HNOA) Insurance

This policy covers liability if you or your employees use personal or rented vehicles for business purposes. If an employee causes an accident while using their personal car for a work errand, HNOA provides liability coverage where personal auto insurance might fall short.

Example: You send an employee to pick up spare tools for a job in their own car, and they cause a fender bender. HNOA helps with the liability claim.

Umbrella Insurance

Umbrella coverage provides extra protection beyond the limits of your existing policies, like general liability and commercial auto. Once a claim exceeds the limits of your underlying policy, umbrella insurance kicks in to cover the remaining amount.

Example: You’re sued for $1 million after a client claims you installed the roof incorrectly and this led to a severe leak and water damage when it next rained. Your general liability policy caps at $500,000. Umbrella insurance can cover the remaining $500,000.

Cyber Liability Insurance

Cyber liability insurance covers losses related to cyberattacks, data breaches, and other digital risks, particularly important if you store client info online. This covers legal costs, notification expenses, and credit monitoring for affected clients.

Example: Your bookkeeping software is hacked, and client addresses and payment details are leaked. Cyber liability helps manage the fallout.

Together, these policies form a comprehensive insurance plan for all locksmith companies. While not every business needs all of them, understanding your risks and matching them with the right coverage ensures your operation stays protected, whether you’re a solo contractor or manage a growing team.

Locksmith Company Insurance Requirements

Locksmith companies are generally not mandated by federal auditory specific insurance policies unless they have a locksmith company that crosses state lines. Even still, certain types of insurance may be required depending on state laws, local regulations, and the nature of your business operations.

Workers’ Compensation Insurance: In most states, if you have employees, you’re required to carry workers’ compensation insurance to cover medical expenses and lost wages for work-related injuries or illnesses. However, Texas does not mandate this coverage for private employers, though it’s still highly recommended to protect both your employees and your business.

Commercial Auto Insurance: If your business owns vehicles used for work purposes, most states require commercial auto insurance to cover liabilities arising from accidents. In Texas, commercial auto insurance is mandatory for business-owned vehicles.

General Liability Insurance: While not legally required, general liability insurance is often necessary to secure contracts and is highly recommended to protect against claims of property damage or bodily injury. Some clients may require proof of this coverage before doing business with you.

It’s important to check with your local city or county government to understand specific licensing and insurance requirements applicable to your area.

How Much Does Locksmith Business Insurance Cost?

Locksmiths pay an average of $62 per month for general liability insurance. Several factors influence the cost of business insurance coverage, including your business location, the number of employees, the types of services you offer, the records you keep, your claims history, and whether you transport expensive tools.

Insurers also consider the amount of coverage you choose and whether you package policies together. While it may be tempting to go with the cheapest option, it’s important to choose a plan that truly protects your business from its most likely risks.

How Is Your Locksmith Business Insurance Cost Calculated?

Insurance underwriters calculate your locksmith business insurance premium based on several key risk factors unique to your business. As mentioned, one of the biggest considerations for an insurance underwriter is the type of work being done. If you specialize in commercial services or emergency services, using a mobile locksmith unit, this might cost more.

The size of your company matters too; the higher your revenue and larger your projects, the higher your risks.

Where your company operates is important. Locations with high crime or prone to natural disasters may see higher insurance costs. A big part of this has to do with where you have to drive company vehicles in order to reach your customers and the dangers associated with that area such as high traffic in a major city versus a suburban area.

Underwriters also look at your claims history—if you’ve filed previous insurance claims, you could be seen as a higher risk. The value of your tools, whether you own or lease business vehicles, and the type and amount of coverage you choose all factor into the cost as well. Even your business structure (LLC vs. sole proprietor) can affect how your policy is priced.

Tips To Lower Your Locksmith Business Insurance Costs

Insurance costs can add up quickly for locksmith companies, but there are practical ways to keep your premiums manageable without skimping on coverage. The key is to understand which factors you can control and take proactive steps to minimize risk.

• Mitigate risks. Proactively identify the risks your employees face and try to mitigate them with strategic route planning for mobile locksmith units so that they can avoid high traffic areas or otherwise dangerous areas where possible as well as safe driving courses and training for your staff.
• Increase training. Proactively implementing and documenting specialized training programs including the proper use of tools, Safety procedures, and Security standards can help you keep costs low.
• Invest in security. If your locksmith business has mobile units, invest in specialized technology to monitor driving behavior and keep tabs on the location and routes of your drivers. Similarly, invest in security systems and adequate lighting or surveillance to deter theft and vandalism when your fleet is stored back at your company premises, and for your office.
• Bundle your policies. Combine general liability, property insurance, and other coverages into a Business Owner’s Policy (BOP) to qualify for a multi-policy discount.
• Consider Hired and Non-Owned Auto (HNOA) coverage. If you or your employees use personal vehicles for work, HNOA can be more cost-effective than a full commercial auto policy.
• Keep a clean claims history. Avoiding claims through proper training and safety procedures can lower your risk profile and lead to reduced premiums over time.
• Invest in workplace safety. Implementing safety protocols and training for employees helps reduce the chances of injury claims and can lower workers’ compensation costs, especially ongoing training for your employees. Many insurance companies offer discounts for comprehensive safety protocols.
• Raise your deductible. Opting for a higher deductible can lower your monthly premium, but be sure your business can absorb the extra out-of-pocket cost in case of a claim.
• Review your coverage annually. Adjust your policies as your business evolves to avoid paying for coverage you no longer need.
• Compare quotes from multiple insurers. Rates vary widely, so shopping through Insuranceopedia can help you find the best deal for your current needs.

Taking a strategic approach to your insurance planning can make a real difference in your bottom line. With a little research and regular review, you can stay protected and cost-efficient at the same time.

Following these steps helps ensure you’re properly insured and set up to handle risks confidently and professionally.