California handyman license and insurance requirements

California handyman license and insurance requirements

Ashley Henshaw
By Ashley Henshaw
Feb 1, 2024
9 min read

California may be one of the best places to find work as a handyperson. The state ranks second only behind New York in the nation for employment in handyman services, with over 137,000 maintenance and repair workers.

Many of these business owners earn an above-average wage, and four of the top 10 highest-paying metropolitan areas for maintenance and repair workers are located in the state of California.

If you’re wondering what type of work can a handyman do legally, it largely depends on the type of work you plan to do. Learn more about the California handyman laws and insurance requirements in this guide, which covers the following topics:

Do you need a license to be a handyman?

If you plan to perform typical handyperson services, such as minor repairs and basic maintenance, you will unlikely need a license.

You only need a license in California if you plan to perform certain types of jobs beyond the scope of minor repairs. The California Contractors State License Board (CSLB) limits unlicensed work to less than $500 including labor and materials. In that case, you must have a California general contractor license.

See California’s licensing classifications.

What’s the difference between a handyman and a general contractor?

Before we get into the details of obtaining a license in California, it’s important to clarify what it means to be a handyman — because this will affect whether or not you need a license and what type of insurance you will need.

A handyperson does small repairs, carpentry or minor maintenance jobs. Typically, these jobs only involve one person.

If you work on larger home improvement projects that are part of the structure, such as building a deck or wiring a new kitchen that requires subcontractors, you could be considered a contractor and need the appropriate license and insurance coverage.

A handyperson is usually someone who can complete a job on their own, working directly with homeowners. Understanding the difference is important since unlicensed contractors could face fines, misdemeanor charges or even jail time.

So what can a handyman do without a license? Here are some examples to help determine if the jobs you perform mean you’re a handyman or a general contractor.

Handyman vs. Contractor

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How to become a handyperson in California

Here’s an overview of what’s required to start a handyman business in the Golden State. Note, that these requirements are at the state level; local requirements may also apply, so check with the municipality where you plan to operate.

1. Get a contractor license

If you take on work valued at more than $500, you need a valid contractor license. Most domestic repair persons will probably get a B-2 Residential Remodeling Contractor’s license.

You’ll need to print out and mail your application to the CSLB. You must also submit a check or money order for the $450 application fee.

Upon approval of your application, you must pass two licensing exams:

  • Law and business exam
  • Trade exam

After passing the exams, you must complete the following steps:

  • Pay a licensing fee of $200
  • Submit your fingerprints for a background check
  • Obtain a contractor bond
  • Provide proof of insurance

Learn more about getting a contractor license in California.

2. File state income tax

All businesses must file with the Franchise Tax Board (FTB) and with the Internal Revenue Service (IRS).

3. Register your business

If you’re a sole proprietor, you don’t need to get a business license, but if you’re forming a partnership, an LLC or a corporation, you’ll need to file with the California Secretary of State.

4. File paperwork for having employees (optional)

If you will have employees, you must:

Local California handyman business license requirements

Besides fulfilling the state-level business license and insurance requirements in California, it’s important to check local regulations as well.

Los Angeles

If you’re doing business in Los Angeles, you need a Business Tax Registration Certificate (BTRC) from the City’s Office of Finance. This includes handypersons.

In your first year as a handyman, you won’t be exempt from taxes. However, you will only have to pay them once you renew your BTRC in the second year. This is known as the Back Tax.

Finally, if you’re a handyman in Los Angeles, you must meet the insurance requirements set by the California Contractors State License Board if you require licensing.

San Diego

Looking to start your handyperson business in San Diego? You’ll need a Business Tax Certificate for tax purposes. But don’t forget, this certificate doesn’t replace other legal requirements.

If you’re planning on taking on a job that costs more than $500, you’ll need a state contractor license. And for certain tasks like plumbing or electrical work, the Development Services Department will require you to have specific city permits.

While San Diego doesn’t have its own insurance rules for handypersons, you’ll still need to follow the State of California’s rules, listing the City of San Diego as an additional insured on your policies.

Lastly, your Workers’ Compensation policy should include an endorsement for the waiver of subrogation of rights against the City of San Diego and its representatives.

San Jose

In San Jose, handypersons and all other businesses must register for a Business Tax Certificate with the City’s Finance Department.

This certificate does not entail clearance for zoning, fire code, occupancy, or any other permits or licenses that may be required for the specific type of business.

San Jose does not impose city-specific insurance mandates on handypeople, but they must adhere to state-level requirements set by the California Contractors State License Board.

San Francisco

Handymen in San Francisco need to register their business with the City and County of San Francisco through the Office of the Treasurer and Tax Collector.

While this registration is mandatory, it’s different from obtaining a separate City Business License, which only some businesses need to obtain.

The insurance requirements for a handyman in San Francisco are governed by the California Contractors State License Board (CSLB).

Bond requirements for contractor licenses

All California contractor license applicants must file a $25,000 surety bond with the CSLB. If you are registered as an LLC, you must file an additional $100,000 bond with the CSLB.

You must obtain your contractor’s bond from a surety company licensed by the California Department of Insurance.

The bond must include:

  • Your business name
  • Your contractor license number
  • The signature of the attorney-in-fact for the surety company

You must use a bond form approved by the Attorney General’s office and ensure that it arrives at the CSLB within 90 days of the bond’s effective date.

What kind of insurance does a handyman need?

If you obtain a California contractor license, general contractor insurance can help protect your business.

Handyman insurance may be a better fit for you if you don’t need a license because you’re only performing smaller jobs.

Some types of California small business insurance available for a handyperson include:

Workers’ Compensation insurance

In California, all employers are required by law to have workers’ compensation insurance. In the event of an on-the-job injury, this insurance can help cover lost wages, medical costs and more.

Workers’ comp is also required for certain specialty contractor license classifications, such as concrete, roofing and tree trimming, regardless if there are any employees.

General Liability insurance

California general liability insurance can help cover third-party bodily injury and accidental property damage. Your clients may ask for proof of this insurance.

While liability insurance is not required for sole proprietors, it is for LLCs. LLC contractor licenses must carry a minimum aggregate limit of $1 million.

Tools and Equipment insurance

If damages or theft affect your work gear, tools and equipment insurance can help cover the cost of repair or replacement.

Commercial Auto insurance

Handypersons typically drive to different job sites. Commercial auto insurance can help cover accident-related costs, like property damage and medical expenses.

All drivers in California must be insured. Here are the minimum liability insurance requirements:

  • $15,000 for injury/death to one person
  • $30,000 for injury/death to more than one person
  • $5,000 for damage to property

Commercial Property insurance

Commercial property insurance can help provide coverage for damage or vandalism to a property that you own or rent as well as your work inventory and equipment.

How NEXT supports California handypeople

NEXT helps you get the right handyman insurance or general contractor insurance at an affordable price. We design custom packages to satisfy licensing requirements and protect your business.

Using our online service, you can apply for coverage and get a certificate of insurance for your handyperson business in just minutes. You can access your account from any computer or mobile device, making it easy to share additional COIs as needed at no extra cost.

Get an instant quote online today.

Do you have projects in another U.S. state? Learn what states require handyman licenses in our summary of handyman license requirements.

This information has been provided as a service. It is correct and up-to-date to the best of our knowledge; however, it is in no way intended to offer legal advice and you must always consult with local authorities before you make any business decisions. Regulations and requirements may change at any time.

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Ashley Henshaw
About the author

Ashley Henshaw was a contributing writer at NEXT. She specializes in small business topics, covering everything from insurance and branding to web hosting and cryptocurrency.

Her work has appeared in The Huffington Post, AOL City's Best, Citysearch, USA Today, The San Francisco Chronicle and Livestrong.

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