How do I know if a job has crossed into "needs a licensed contractor" territory?

It depends on your state's specific threshold and rules, which vary — some cap it by dollar value per job, others by the type of work involved. It's worth checking your state's contractor licensing board directly before bidding a job that feels bigger than your usual scope.

Is it better to get licensed myself or keep using subs for electrical and plumbing?

There's no universal answer — it depends on how often you're hitting that ceiling and what you want your business to look like. Using licensed subs keeps your own scope narrower and can simplify your insurance; getting licensed opens up bigger jobs but changes your risk profile and likely your premium.

What's the difference between a performance bond and general liability insurance?

GL insurance responds to third-party injury or property damage claims. A performance bond is a separate guarantee that you'll complete a contracted job — if you don't, the bonding company pays the client and then seeks reimbursement from you. They solve different problems and most contractors eventually need both.

Do I need to update my policy every time I hire a new subcontractor?

Not necessarily update your own policy, but you should collect a current certificate of insurance from every sub you bring onto a job — it protects you if a claim arises from their portion of the work.

My crew is only 2 people right now — is it too early to think about contractor-level coverage?

It's actually the right time. Rating and requirements shift the moment you have your first W-2 employee, not once you hit a certain size — getting the structure right early avoids a messier fix later.

Handyman Contractor Insurance

The Gray Zone Between Handyman and GC

As jobs get bigger — a full basement remodel instead of a punch list, a multi-unit turnover instead of one repair call — you start bumping into the line where "handyman" work legally becomes "contractor" work. That line is defined state by state, usually by a dollar threshold per job or by whether the work touches structural, electrical, or plumbing systems beyond minor repair. Crossing it without the right license isn't just a legal risk; it can also affect how a claim gets handled if something goes wrong on that job.

When the Smarter Move Is a Licensed Sub, Not a New License

Getting a full contractor's license is a real option, but it's not the only one. Many growing handyman operations instead build a bench of licensed subs — an electrician, a plumber — who they bring in for the portions of a job that cross the threshold, while keeping the rest in-house. Done right, this actually narrows your own liability exposure on those tasks, since the licensed sub carries responsibility for their scope. Your policy needs to reflect that structure clearly, though, or a claim can get messy about who was responsible for what — our page on state-by-state requirements covers how to find your specific threshold.

What Adding a Crew Actually Changes

See our full cost comparison for solo vs. with employees for real numbers — but broadly, three things shift at once:

Workers compensation becomes mandatory in most states the moment you have a W-2 employee — and it's not optional paperwork, it's the thing standing between a jobsite injury and a lawsuit against your business
Payroll-based GL rating replaces simple solo-operator pricing, since more people working under your name means more chances for something to go wrong
Subcontractor documentation — certificates of insurance from every sub you use — becomes part of protecting your own policy, not just theirs

Bonds Enter the Picture on Bigger Jobs

Once you're bidding larger renovation or multi-unit contracts, some clients and GCs will ask for a performance bond or license bond, separate from your insurance. This isn't insurance in the traditional sense — a bond guarantees you'll complete the contracted work, and if you don't, the bonding company pays out and then comes after you to recover it. It's worth understanding the difference before a client's request catches you off guard mid-bid.

What Larger GCs Typically Want to See

Higher limits ($2M/$4M is common), additional insured status, waiver of subrogation, and sometimes primary and non-contributory wording — the same vendor-compliance expectations property managers use, just applied contract by contract instead of through software.

Structuring This Correctly

Tell us your current team size, how much of your work goes through subs versus employees, and the scale of projects you're bidding now versus a year ago. We'll build a policy around where your business actually is — and where it's headed.