How much work you can do without a contractor license depends on the projects you want to tackle and the state laws where the job is completed. Handyman and contractor jobs come in all shapes and sizes.
If you’re considering getting into home repair and renovation, you have much to think about. You need to know what kind of work you can legally do without being licensed, the benefits and downsides of getting a contractor license, and how to decide if it’s right for you.
What is a contractor license?
A contractor license is a certification given to contractors who meet at least the minimum standards required by their state or municipality. Depending on the state, if you take on home improvement or construction projects without it, you could be charged with a misdemeanor or face other penalties.
In some states, a license is necessary only if you bid on a large project. For example, contractors in Alabama need a license for commercial or industrial projects worth more than $50,000 or residential contractor projects worth more than $10,000. You must get a license in Georgia to do work worth more than $2,500.
Pros and cons of being a licensed contractor
Being a licensed general contractor is great, but it also has drawbacks. Here are the pros and cons to consider.
Benefits of getting a contractor license
Although some states don't require licenses, you'll find several advantages to having one. As a licensed contractor, you can:
- Legally complete different kinds of work
- Hire subcontractors to help with projects
- Increase profits by booking larger jobs and charging higher rates
- Offer a variety of services for residential and commercial customers
- Build credibility with customers by being licensed and insured
- Improve your skills, knowledge, and business understanding
Downsides to getting a contractor license
Contractor licensure has many benefits, but you must also consider the drawbacks. You’ll need to invest time and money for the Contractors State License Board (CSLB) exam and application fees. You may also need to document your work experience and complete a background check.
Another reason you may choose to work in contracting without a license is that having a license can limit the work you can do. For example, without a contractor license, you may be able to paint or assemble furniture.
But after you get a specific license (like electrician or plumbing), you may be limited to taking jobs specific to your license, training, and experience. Sometimes the variety of jobs available — despite the lower monetary caps — outweighs the need for a license.
What kind of projects can a contractor without a license do?
The type of projects you can do without a license varies by state. Check with your state guidelines and local building regulations on work types and monetary caps, but common tasks that may not require a license include:
The average homeowner or business owner may find installing blinds, shades, and window treatments challenging and time-consuming. You can usually install window treatments without a license if the project falls under the maximum dollar amount set by your state and doesn’t involve electrical work.
Some states allow you to paint without having a license or registration. For example, you can work as a painting contractor without a license on jobs in Arizona that pay less than $5,000, but California requires registration and licensing for painting jobs over $500.
Installation of new carpet or pulling out and replacing old flooring may also be exempt from a license. You can look into the International Certified Flooring Installers Association (CFI) to learn about career training and licensing requirements.
Installing a wall-mounted television to drywall is another task many homeowners and business owners may want to avoid handling themselves. Handypersons and contractors may complete the work without a license.
Individuals and businesses can usually hire crews for garbage hauling and trash cleanup from their property, even those without licenses.
In most states, you can perform minor contracting jobs without a license if it doesn’t involve electrical or plumbing work. However, larger projects or jobs worth more than a specific dollar amount can require a license. Going beyond the scope allowed by your state is illegal.
Projects a licensed contractor can do
The list of projects that a licensed contractor can do is extensive. With a general contractor license, you can take on jobs like roofing or serving as a building contractor to build a new home or structure or remodel and renovate an existing one. Since many states have a financial cap on the value of work you can do without a license, becoming a licensed contractor allows you to take on larger, more profitable projects.
It can also open up other trades in the construction industry that require licensing. A separate license is often required for electrical contractors, HVAC technicians, plumbers, and other specialty contractors.
Deciding whether to get a contractor license
Depending on the work you want to do, you may find it beneficial to get a proper license. If you’re considering becoming a licensed contractor, there are many factors to consider.
The most important is what regulations are active in your area. If your state requires you to have a contractor license for the type of work you want to do, you must pursue licensing.
Keep in mind there’s a difference between getting a professional license and registering your business. A business license simply lists you in the state registry. Professional licenses for contractors, however, require passing a competency test, demonstrating relevant work experience, verifying your financial records, and providing proof of general liability insurance.
It also depends on the services you want to provide. You can often operate without a contractor license if you'd rather stick to quicker, smaller-scale projects like handyman work or general home repairs.
Protecting your business with insurance
Contractor insurance helps protect against several risks you’ll encounter on and off the job, from injuries to property damage.
Many states require contractors to have a qualifying general liability insurance policy. For businesses with one or more employees, a certificate verifying workers’ compensation insurance is also required in most states.
At NEXT, we’re committed to helping contractors thrive. That’s why we’ve made it easy to get affordable, customized insurance to protect your business.
Everything is 100% online, so you can get an instant quote, review options and buy coverage in less than 10 minutes — no calling an agent. You’ll have immediate 24/7 access to your certificate of insurance (COI) as soon as you buy your insurance.