How Much Does Business Insurance Cost For Locksmiths? 2025 Rates

In 2025, U.S. locksmith businesses can expect to pay between $540 and $780 annually for comprehensive business insurance, averaging $45 to $75 per month. The primary cost drivers are location, services offered, business size, claims history, coverage limits, and number of employees.

How Much Does Locksmith Insurance Cost?

The average locksmith in the U.S. pays between $540 and $780 per year for full insurance coverage, or about $45 to $75 a month. But this is just an estimate, your actual cost can be higher or lower depending on your specific situation.

Every locksmith business is different, so there’s no one-size-fits-all insurance price. A single locksmith with a few basic tools will usually pay less than a larger business with multiple employees, service vans, and advanced equipment.

Things like the types of services you offer (such as emergency lockouts or high-security systems), where you operate, your past claims history, and how many employees you have all affect your business insurance cost.

Here are some of the biggest cost drivers:

• Number of employees (affects workers’ comp and liability)
• Property size and value (affects commercial property coverage)
• Past claims history (insurers charge more if you’ve filed claims)
• Business interruption coverage and other add-ons

Understanding these variables can help you better estimate your insurance needs and prepare for the real costs of protecting your locksmith business.

Average Locksmith Insurance Costs For Coverage Types

When it comes to protecting your locksmith business, different types of insurance cover different risks. Understanding the average cost, coverage details, and what influences pricing for each policy type can help you build a more effective insurance plan. Here’s a closer look at the major coverages most locksmith businesses need.

• General liability insurance: $45 per month
• Business owner’s policy: $50 per month
• Workers’ compensation insurance: $250 per month
• Commercial auto insurance: $168 per month
• Professional liability insurance: $79 per month
• Contractor’s tools and equipment: $14 per month
• Commercial umbrella insurance: $76 per month

General Liability Insurance

The average cost of general liability insurance for a locksmith business is about $45 per month.

General liability covers third-party bodily injury, property damage, and advertising injuries. For example, if you accidentally damage a customer’s door while installing a new lock, this policy would help pay for the repair costs and any legal fees if the customer files a claim.

Typical policy limits are $1 million per occurrence and $2 million aggregate.

Factors that influence the cost include the business size, location, customer traffic volume, previous claims history, and any subcontractors or additional insured endorsements.

Business Owner’s Policy (BOP)

The average cost of a business owner’s policy (BOP) is about $50 per month for locksmiths.

A BOP bundles general liability insurance with commercial property insurance. It protects against customer injuries, property damage, and loss or damage to your locksmith shop and tools. For example, if a fire breaks out in your workshop and damages your key-cutting machines and inventory, the BOP would help cover the cost of repairs and replacements.

Typical policy limits are $1 million per occurrence and $2 million aggregate for liability, with separate property coverage limits based on the value insured.

Cost factors include the size of your business, the amount of foot traffic, and the value of your business property.

Workers’ Compensation Insurance

The average cost of workers’ compensation insurance for a locksmith is around $250 per month.

Workers’ comp covers medical bills, rehabilitation, and lost wages for employees injured on the job. For example, if a locksmith cuts their hand while rekeying a lock and needs medical treatment, workers’ comp would help pay for their hospital visit and a portion of their lost wages while they recover.

Policy limits are regulated by each state, but typically include medical costs and a percentage of lost wages without a set cap.

Premiums are influenced by the size of your payroll, the type of work employees perform, your claims history, and any implemented safety programs.

Commercial Auto Insurance

The average cost of commercial auto insurance for a locksmith is about $168 per month.

Commercial auto insurance covers vehicles owned or used by the business for accidents, theft, vandalism, or damage. For example, if you’re driving your work van to a client’s location and get into an accident, this policy would help cover the repair costs for your vehicle and any damage or injuries caused to others.

Factors influencing the cost include your coverage needs, the value of the vehicle, and your insurance claims history.

Professional Liability Insurance

The average cost of professional liability insurance for a locksmith is about $79  per month.

Professional liability insurance (also called Errors and Omissions Insurance) protects your business if a customer claims you made a mistake, gave bad advice, or didn’t do the job properly, and it caused them a financial loss.

For example, if you install a new lock system but accidentally leave it vulnerable to break-ins, and the customer’s property gets burglarized, they might sue you for negligence. This insurance would help cover legal fees and any compensation you’re required to pay.

The cost of professional liability insurance depends on things like how much coverage you want, how big your business is, and the kind of services you provide.

Contractor’s Tools And Equipment

The average cost of contractor’s tools and equipment insurance for a locksmith business is about $14 per month.

Contractor’s tools and equipment insurance covers the repair or replacement of tools and equipment used in your business if they are lost, stolen, or damaged.

For example, if someone breaks into your work van and steals your key-cutting machine, lockpicks, and drills, this insurance would help pay to replace the stolen tools. Without it, you’d have to pay out of pocket to get back to work.

The cost of contractor’s tools and equipment coverage depends on the value of your tools and equipment and the type of work you do.

Commercial Umbrella Insurance

The average cost of commercial umbrella insurance for a locksmith business is about $76 per month.

Commercial umbrella insurance gives your business extra protection by adding more coverage on top of your existing liability policies (like general liability or commercial auto). It kicks in when the costs of a claim go over the limits of your other insurance.

For example, if a customer is seriously injured due to a faulty lock installation and sues you for $1.5 million, but your general liability policy only covers $1 million, umbrella insurance would help cover the remaining $500,000.

The cost of commercial umbrella insurance mainly depends on how much extra coverage you choose to buy.

What Factors Impact Your Locksmith Insurance Costs?

Locksmith insurance premiums are carefully calculated by underwriters based on your business’s risk profile. Factors like the types of services you offer, your location, years of experience, number of employees, and past claims history all play a role in determining what you’ll pay for coverage.

Type Of Locksmith Services

Not all locksmiths face the same risks. If you only cut keys at a retail location, your insurance costs may be lower. But if you offer 24/7 emergency lockout services, vehicle unlocking, or high-security system installations, your premiums may be higher due to the increased risk and complexity of the work.

Extra Services And Add-Ons

Offering extra services, like smart lock installation, safe opening, or access control systems, can raise your insurance cost. These services may carry higher risks, especially if they involve expensive equipment or sensitive security setups.

Location

Where your locksmith business operates matters. Working in big cities with higher crime rates or more legal claims can increase your insurance costs. Businesses in smaller towns or lower-risk areas often pay less for coverage.

Size Of Your Business

A solo locksmith working out of a van will likely pay less than a larger company with multiple employees, vehicles, and shop locations. More employees and equipment mean higher chances of accidents, which can raise the cost of workers’ comp and commercial auto insurance.

Value Of Your Tools And Equipment

Locksmiths often use specialized tools like key-cutting machines, drills, lock picks, and programming devices. The more valuable your tools, the more you’ll pay for coverage like contractors tools and equipment insurance.

Claims History

If you’ve had past insurance claims, such as damaging a customer’s property or being involved in an accident, your premiums may go up. A clean claims record shows you’re low-risk and can help you get better rates.

Insurance Provider

Not all insurance companies are the same. Some specialize in trades like locksmithing and may offer better pricing, custom coverage options, or more flexible terms. It’s smart to compare quotes from a few providers to get the best deal.

How To Lower Your Locksmith Insurance Costs

Being a locksmith can bring in expenses, but your insurance bill doesn’t have to break the bank. While you can’t eliminate the need for coverage, you can take smart steps to reduce your premiums without sacrificing protection. Here are some practical ways to lower your locksmith insurance costs:

1. Bundle Your Policies

One of the easiest ways to save is by bundling multiple policies. Most insurers offer a Business Owner’s Policy (BOP) that combines general liability and property insurance at a lower rate than if you bought them separately. If you also need workers’ compensation, bundling both through the same provider can lead to additional discounts. Not only does this simplify your paperwork, but it also makes your coverage more cost-efficient.

2. Ask About Discounts

Insurance companies often reward businesses that commit to a policy long-term. Ask your provider if they offer multi-year discounts for signing a two- or three-year agreement instead of renewing annually. You might also qualify for lower rates if you pay your premium in full instead of in monthly installments.

3. Implement Safety Measures

Accidents can be expensive for both you and your insurance company. Taking steps to keep your locksmith business safe can help lower your insurance costs over time. For example, using the right tools, keeping your equipment in good condition, wearing safety gear, and being careful when working on doors, vehicles, or safes can reduce the chance of injuries or property damage. This shows insurers that you run a safe and responsible business, which can lead to lower premiums.

4. Create A Safe Working Environment

A strong safety program can help lower your workers’ compensation costs. For a locksmith business, this means training employees on safe tool use, proper lifting techniques, avoiding sharp edges when handling locks, and staying alert when working in unfamiliar or high-traffic areas. Fewer workplace injuries mean fewer insurance claims, which can lead to lower premiums over time.

5. Adjust Your Deductible

Your deductible is the amount you pay out of pocket before insurance coverage kicks in. Choosing a higher deductible can significantly reduce your monthly premiums. Just make sure you can comfortably cover that amount if a claim arises.

By taking these steps, you not only save money but also make your business a safer, and more resilient business.