Handyman businesses are indispensable to homeowners and small businesses alike. From fixing leaky faucets to installing shelves, handymen provide a wide range of essential services that keep our homes and offices running smoothly. However, while handyman insurance is crucial for protecting your business from various risks, it’s equally important to understand what it doesn’t cover. Knowing these exclusions can save you from potential legal and financial pitfalls, especially when operating in states with specific licensing requirements like California.
What’s Not Covered by Handyman Insurance?
1. Structural Work
Handyman insurance generally does not cover structural work, which includes tasks that involve altering the foundational elements of a building, such as walls, roofs, and load-bearing structures. These types of jobs are typically classified as construction work and require specialized licenses and insurance policies designed for contractors. Attempting to perform structural work without proper coverage can lead to significant financial and legal repercussions.
2. Roofing
Roofing is another common exclusion in handyman insurance policies. This is because roofing work is inherently risky, with a higher likelihood of accidents such as falls, which can lead to severe injuries or even fatalities. Due to the high-risk nature of this work, insurers often require specific coverage for roofing contractors, which is not included in a standard handyman insurance policy.
3. Work Requiring a Contractor’s License
In many states, certain tasks legally require a contractor’s license, and these tasks are not covered under a handyman insurance policy. For instance, in California, if a project exceeds $500, it requires a licensed contractor. Performing such work without the appropriate license not only voids your insurance coverage but also puts you at risk of fines and legal action. Insurance companies generally exclude coverage for work that falls outside the legal scope of a handyman’s licensure.
4. Large-Scale Projects
Large-scale projects, particularly those involving significant construction, electrical, or plumbing work, are typically not covered by handyman insurance. These projects often require specialized skills, permits, and higher liability limits, which go beyond what a standard handyman policy offers. Taking on such projects without the proper coverage can expose your business to considerable risk.
5. Intentional Damage
While this might seem obvious, it’s worth noting that any intentional damage or fraudulent claims are not covered under handyman insurance policies. If it is found that damage was caused deliberately or that a claim was made in bad faith, your policy could be voided, and you could face legal consequences.
State-Specific Licensing Requirements: California as a Case Study
California is a prime example of a state with stringent licensing requirements that directly impact what your handyman insurance will cover. Under California law, any handyman or contractor performing work that totals $500 or more (including labor and materials) must hold a valid contractor’s license. This rule applies to individual jobs as well as a series of smaller jobs that together exceed $500.
If you take on a project over this amount without the required license, your handyman insurance will not cover any claims that arise from that work. Moreover, you could face penalties from the California Contractors State License Board (CSLB), which could include fines or even criminal charges. The CSLB also has the authority to impose stop-work orders on unlicensed contractors, halting your business operations and further jeopardizing your income.
Why Understanding Exclusions Is Crucial
Understanding the exclusions in your handyman insurance policy is not just about avoiding coverage gaps—it’s about ensuring that your business operates legally and ethically. By staying within the bounds of what your insurance covers and adhering to state licensing laws, you can protect your business from unnecessary risks and build a reputable, trustworthy brand.
Moreover, by knowing these exclusions, you can make informed decisions about whether you need additional coverage or a contractor’s license. If you frequently encounter jobs that fall outside the scope of your handyman insurance, it may be worth investing in a contractor’s license and the appropriate insurance to expand your service offerings safely.
Safeguard Your Business with Comprehensive Coverage
While handyman insurance is a vital safeguard for your business, it’s important to recognize its limitations. For tasks that involve structural work, roofing, or any projects requiring a contractor’s license, it’s crucial to either obtain the necessary licensing and coverage or refer these jobs to licensed contractors. This not only ensures your business remains compliant with state laws but also protects you from potential financial losses.
At USA Business Insurance, we understand the unique needs of handyman businesses. Our tailored insurance policies are designed to protect you from the specific risks you face in your line of work. Contact us today to learn more about how we can help you secure the right coverage for your business.
