Usually, yes, though the reason changes with the situation. If you hire help, workers’ comp becomes a legal question, and the point where it kicks in varies by state: California requires it with even one employee, while Texas generally lets private employers choose. Contractor licensing has separate small-job limits, such as the $1,000 limits in California and Arizona, and those come with conditions about permits, workers and advertising. Then there are your customers. Homeowners, landlords and property managers often want a certificate showing general liability before you touch their property. A work truck and the tools you carry raise their own coverage questions.
The policies a handyman business usually looks at
- General liability. The standard commercial liability policy. Its main parts include premises liability (injury or damage from a condition on your premises or from your operations in progress, on or away from your premises) and completed operations (injury or damage that arises out of your completed work). Its major exclusions include autos, workers’ comp and employers liability, damage to your own work, and property in your care, custody or control. More on general liability.
- Workers’ compensation. Designed to pay benefits to an employee hurt on the job on a no-fault basis. Its employers liability part is designed to respond to certain suits by employees that the workers’ comp part doesn’t handle.
- Commercial auto. A business auto policy is designed for liability from autos used in your business and damage to the covered vehicle, and it can extend to hired and non-owned autos. More on commercial auto.
- Tools and equipment. Inland marine is designed for business property in transit, and one of its common forms is an equipment floater, such as a contractors equipment floater. That is where I look first for gear that moves from job to job.
Which of these you need depends on how you work. A solo handyman with no employees and a personal pickup has a different list than a three-person crew with a company van.
When workers’ comp is required
Workers’ comp is set by state law, and the trigger varies by state. Three examples show how far apart they are:
- California requires employers to carry workers’ comp even if they have only one employee (Labor Code Section 3700).
- Florida requires it of construction-industry employers with one or more employees, counting owners who are corporate officers or LLC members, though qualifying owners can apply for an exemption. Non-construction employers must carry it at four or more employees.
- Texas generally lets private employers choose. Employers without coverage, called non-subscribers, still have to tell the state they don’t have coverage and report certain workplace injuries.
If you work alone with no employees, your state may not require comp at all, but a client’s contract still can. Check your own state’s rules before you hire anyone, including a helper for a single weekend.
Small-job license limits vary by state
Many states let someone do minor work without a contractor license, but the limits and conditions differ, and going past them changes what the law expects of you.
- California. Since January 1, 2025, the minor work exemption has been $1,000, up from $500 (AB 2622). The job can’t require a permit of any kind, and the unlicensed person can’t employ anyone on it. Ads for that work have to disclose that you are not licensed. Bidding over $1,000, doing work that needs a permit or employing any workers opens you to legal action.
- Arizona. A.R.S. § 32-1121(A)(14) exempts casual or minor work where the total contract price, labor and materials included, is less than $1,000. It doesn’t apply if the work needs a local building permit, is part of a larger operation, or is split into smaller contracts to stay under the limit, and ads must say “not a licensed contractor.” It also doesn’t cover fire safety work or connecting to a gas or fuel supply.
Note how California ties both rules together: hiring a helper ends the exemption, and it also puts you under the state’s workers’ comp requirement. If your jobs are growing past your state’s limit, check what your state’s contractor board requires, and see contractor license bonds for how those bonds work.
Clients and property managers asking for proof
Even where no law requires it, the people hiring you often do. Homeowners, landlords, HOAs and property managers commonly ask for a certificate of insurance before work starts, and some want to be added to your policy as an additional insured. A certificate only summarizes the coverage on your policy. It doesn’t amend, extend or alter that coverage, so the policy has to be in place first.
When I shop a handyman policy, underwriters want to know what work you actually do and how much of it. General liability can be rated on square footage, payroll or gross sales depending on the class, so expect questions about your revenue, your employees, any subcontractors, and whether you touch electrical, plumbing, roofing or other higher-risk trades. A clear answer up front keeps the policy matched to the jobs you take. More on contractor insurance.
Common questions
Is insurance legally required for a handyman?
It depends on the state and your setup. Workers’ comp rules are set by each state and usually turn on whether you have employees; California requires it with even one. General liability usually comes up through a client’s or property manager’s contract.
Do I need workers’ comp if I work alone?
It depends on your state and how your business is set up. California’s requirement applies once you have even one employee, while Florida’s construction rules count owners who are corporate officers or LLC members unless they qualify for and take an exemption.
Can I do handyman work without a contractor license?
Many states allow small jobs without one, with limits. California’s exemption is $1,000 with no permits and no employees, and Arizona’s covers casual or minor jobs under $1,000 that don’t need a building permit.
Does my personal auto policy cover my work truck?
Ask your insurer before you rely on it. A business auto policy is designed for liability from autos used in your business, and how a vehicle is used affects how it is classified and insured.
What does a property manager mean by a COI?
A certificate of insurance, a document that summarizes the coverage on your policies without changing it. Some managers also ask to be named as an additional insured on your general liability.
Sources
- CSLB Industry Bulletin #24-07: minor work exemption rises to $1,000 (AB 2622)
- Arizona Revised Statutes § 32-1121: persons not required to be licensed
- California DIR, Division of Workers’ Compensation: employer information
- Florida Division of Workers’ Compensation: coverage requirements
- Texas Department of Insurance, Division of Workers’ Compensation: employer resources
- California Department of Insurance: Commercial Insurance guide (Form 700, June 2024)
- Wisconsin Office of the Commissioner of Insurance: bulletin on certificates of insurance (May 5, 2008)
General information about handyman insurance, workers’ compensation and small-job licensing exemptions as of October 2026, not legal or tax advice; your state’s statutes, licensing board and workers’ compensation agency control. Coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued.