Handyman vs. general contractor: What’s the difference?

Contractors typically need a certain amount of education, licensing, and insurance. Handymen simply need the right tools, skills, and knowledge to perform maintenance and repairs for their customers.

While contractors and handymen often perform similar duties, there are a few distinct differences in what they do professionally. Let's explore what separates a handyman from a general contractor, and what types of insurance they may need.

General contractors take on construction projects from start to finish. It’s their job to hire subcontractors, obtain permits, and make sure each project is built according to building codes and zoning laws.

Most states require general contractors to be licensed and/or registered to work on construction projects. Many local governments also have these requirements, even in states that don’t require a license.

A contractor’s license requires a specific amount of education and experience. Some jurisdictions have different types of contractor licenses available, based on the size, type, and location of jobs that a license holder is allowed to work on.

A handyman performs minor home repairs and maintenance for homeowners and others. Handyman jobs are unlikely to require a construction permit or a license, because their scope of work focuses on small projects and small repairs.

Although state and local governments don’t require a “handyman license,” a handyman might be required to obtain a contractor’s license to work on jobs above a certain cost level. They also might be required to obtain a license for any job that requires a permit, or to perform electrical, plumbing, asbestos, or HVAC work.

Even if your handyman services don’t require some type of contractor’s license, you still might need a business license from your local government or your secretary of state’s office.

The main differences between a general contractor and a handyperson are their licensing requirements. They also differ in the size and types of jobs they work on.

A licensed contractor works on larger projects than a handyman typically does. Contractors can build a new home and perform major renovations and structural work, such as remodeling a kitchen or expanding someone’s living room.

A local contractor may hire subcontractors such as an electrician, a plumber, flooring installers, and roofers on large projects.

A handyman works on smaller projects and home maintenance such as pressure washing gutters, patching drywall, basic carpentry, and fixing a leaking roof or faucet.

States typically require a contractor’s license for:

• Jobs above a certain dollar amount (usually $500 or $1,000)
• A project requiring structural changes to a building
• Electrical work, HVAC, plumbing work, or asbestos work
• Anything that requires a construction permit

There are specific benefits and drawbacks to either becoming a handyman or contractor. Let's take a look at the advantages and disadvantages of both professions.

A handyman typically works on home improvement projects that only require one person, with jobs that may take from just a few hours to a couple of days to complete.

They work on small jobs that don’t require permits and typically just have to make sure their clients are satisfied with their work. It’s the type of work that doesn’t require a state license or specialized education, just the ability to perform the jobs their customers hire them for.

Handymen don’t need background checks to perform their work, though they often rely on customer referrals.

For a handyman, insurance is recommended, but not required.

A contractor works on projects that can take several months, with a team of employees or subcontractors, and cost thousands of dollars. A contractor usually needs a specific license, such as a general contractor license, which requires a certain amount of education and experience, along with a background check.

Contractors must obtain building permits for their work and make sure they comply with zoning and building codes.

Contractors usually need certain levels of bonding and insurance.

One of the key differences between general contractors and a handyman business is a contractor’s license typically comes with insurance and bonding requirements.

Whether you’re a general contractor or a handyman, bonding and insurance can keep you financially protected from any mishaps. It’s also a way of letting your customers know that you stand behind your work and are financially responsible.

These insurance policies and bonds are recommended for any general contractor or handyman:

General liability insurance is often the first insurance policy that small business owners and contractors buy. It covers common business risks such as customer bodily injuries, damage to a customer’s property, and advertising injury.

If there’s a slip and fall accident on your business property or if you accidentally damage a customer’s property, any claims or lawsuits would be covered by your general liability insurance.

If you own or rent a property for your business, commercial property insurance covers your business’ location, inventories, and equipment from risks like theft, vandalism, and fire.

With some commercial property insurance, you can add coverage for things like floods, hurricanes, and other natural disasters.

A BOP combines your general liability and commercial property coverage into one policy and is usually cheaper than buying each policy separately.

Workers’ comp insurance is required in most states for businesses with employees. It can also be required for sole proprietors who work in certain riskier professions, such as roofing.

Many contractors and handymen buy this coverage even if it’s not required, because it covers employee medical expenses for work-related accidents and illnesses which your personal health insurance is unlikely to cover. Workers’ comp can also partially offset someone’s lost wages if they’re unable to work.

Commercial auto coverage is for any vehicles your business owns. It’s similar to personal auto insurance and covers the cost of injuries and property damage if you’re at fault in an accident. It also covers vandalism and theft.

A tools and equipment policy can help pay for the repair or replacement of your saws, nail guns, and other tools if they’re lost, stolen, or damaged. This is often purchased by contractors and handymen for any equipment they take with them to job sites, usually for tools that are less than five years old.

Professional liability insurance, also known as errors and omissions (E&O) insurance, covers the cost of lawsuits if someone sues you for making a mistake such as failing to complete a project, failing to meet specifications, or using the wrong materials.

It is typically purchased more by general contractors than handymen.

A surety bond is an agreement between a contractor, their customer, and an insurance company. It’s a financial guaranty that the insurer will reimburse the client if the contractor fails to fulfill the terms of a contract.

Surety bonds are typically used to cover project delays or a failure to obtain building materials.

Your personal auto insurance is unlikely to cover you if you’re using a personal, leased, or rented vehicle for work. If you’re in an accident in your own truck while hauling materials to a job site, you would need a hired and non-owned insurance policy to cover any damages or lawsuits.

Complete Insureon’s easy online application today to compare insurance quotes from top-rated U.S. carriers. You can also consult with an insurance agent on your business insurance needs. Once you find the right types of insurance for your small business, you can begin coverage in less than 24 hours.