Operating a handyman business in Maryland requires proper licensing and insurance. This ensures handymen have the qualifications and expertise to perform quality work and protects homeowners in case of damages or injuries. This guide provides a comprehensive overview of the licensing and insurance requirements for handymen and handyman businesses in Maryland.

Introduction

To work as a handyman in Maryland, you are legally required to obtain a Home Improvement license from the Maryland Home Improvement Commission. This license allows you to perform repairs, maintenance, renovations and other improvement work on residential properties.

The commission issues two types of licenses – for contractors and for salespersons. As a handyman, you will need the contractor license which allows you to solicit, perform and contract for home improvement services. The license demonstrates you have the necessary skills, training and insurance coverage to operate legally.

Failing to obtain proper licensing can lead to penalties, fines or legal action. Homeowners may also refuse to pay unlicensed contractors for any work performed illegally.

Requirements for Becoming a Licensed Handyman

To qualify for a handyman contractor license in Maryland, you must meet the following eligibility criteria:

  • Age – Be at least 18 years old.
  • Experience – Have at least 2 years of experience in home improvement work, construction or related education. This can include carpentry, painting, handyman, electrical work, remodeling, etc. Formal education in a trades program at a college or technical school may substitute for up to 1 year of experience.
  • Exam – Pass a 55-question exam administered by PSI Exams with a minimum score of 70%. The exam covers topics like business operations, lien laws, contracts and other subjects.
  • Insurance – Carry minimum $50,000 liability insurance. You must provide a certificate of insurance from the carrier.
  • Financial solvency – Demonstrate financial stability based on assets, liabilities and net worth. You may need to provide tax returns and bank statements.
  • Criminal records – Disclose any past convictions for crimes related to home improvement or felonies. Submit copies of your criminal records.

In addition to meeting these requirements, you must submit all necessary application forms, documents and fees to the commission to begin the licensing process.

Experience Requirements

To satisfy the 2 years minimum experience requirement, you can gain experience working under the supervision of a licensed contractor. Hands-on experience in home building, remodeling, maintenance or similar fields also counts.

If you don’t meet the experience requirement, completion of an approved educational program can substitute for up to 1 year of experience. This education must equip you with skills relevant to operating a handyman business.

Exam Requirements

Maryland contracts with PSI Exams to administer licensing exams for handyman contractors. The exam consists of 55 multiple choice questions and you must score at least 70% to pass.

Exam subject areas include:

  • Business Law and Project Management
  • Contracts
  • Estimating and Bidding
  • Liens
  • Financial Management
  • Safety
  • Design and Project Sequence
  • Technical Knowledge of the Trade

You can register and schedule exam appointments online through PSI Exams. Locations are available at testing centers across Maryland. The $63 exam fee is paid directly to PSI.

PSI provides a study guide you can purchase to help prepare for the exam. You can also find free study resources online or take exam prep classes.

Financial Solvency Requirements

Part of qualifying for a handyman license includes demonstrating your financial solvency and stability. This ensures you have the resources to operate the business successfully.

As part of the application, you must provide:

  • Personal credit report
  • Business financial statements
  • Proof of assets and liabilities
  • Tax returns

The commission reviews your finances to determine if they comply with the minimum requirements. If your assets, net worth and credit rating are insufficient, you may need to obtain a license bond or indemnitor agreement for approval.

Criminal Records

The commission conducts background checks on all handyman license applicants. You must disclose any past criminal convictions related to home improvements or felonies.

minor offenses unrelated to construction or business activities generally should not stop you from getting licensed. However, recent serious crimes or fraudulent activities could lead to a license denial.

Providing false or omitted information about your criminal record can also lead to license revocation down the road.

Steps to Obtain a New Handyman License

Follow these key steps to get a new handyman contractor license in Maryland:

  1. Attend licensing workshop (optional) – The Maryland Home Improvement Commission offers free licensing workshops to guide applicants through the process. Attending can help ensure you submit the proper documentation.
  2. Register your business name – If you intend to operate your handyman business under a trade name or DBA, you must first register it with the Maryland Department of Assessments and Taxation. Once registered, submit the issued certificate of registration with your application.
  3. Purchase liability insurance – Obtain minimum $50,000 liability insurance coverage for property damage and bodily injuries. This can be obtained through most insurance carriers.
  4. Pass contractor exam – Schedule an appointment through PSI Exams to take the multiple choice exam at one of their testing centers. Bring valid photo ID and pay the $63 exam fee.
  5. Prove financial solvency – Gather required financial statements and other records that demonstrate your assets, income, liabilities and net worth.
  6. Submit license application – Complete the handyman contractor license application in full. Include passport photos, ID, all supporting documents and fees.
  7. Pay licensing fees – In addition to the $63 exam fee, you must pay a $250 license fee plus a $100 Home Improvement Guaranty Fund assessment.
  8. Get fingerprinted – Go to an authorized location to get fingerprinted for an FBI background check.

Once approved, the commission will issue your physical license certificate by mail. You must display this certificate prominently in your place of business.

The initial handyman contractor license is valid for 2 years from date of issue. You must renew it biennially after that to maintain an active license.

Helpful Tips for New Applicants

  • Attend a free licensing workshop for guidance on the application process
  • Study the PSI Exam outline and practice sample questions to prepare
  • Ensure you meet experience and financial requirements before applying
  • Double check that you submit all required documents with your application
  • Pass the exam before applying as scores are only valid for 2 years
  • Get liability insurance quotes and coverage in place early

Steps to Renew a Handyman License

Maryland handyman licenses must be renewed every 2 years prior to expiration to remain valid. Follow these steps to renew your license:

  1. Review expiration date – Check your license certificate to see when your current license expires. Plan to submit your renewal at least 30 days in advance.
  2. Update insurance – Contact your insurance agent to ensure your liability policy is active and up to date. Obtain an updated certificate of insurance.
  3. Submit renewal form – Fill out the license renewal application form and gather any other required documents.
  4. Pay renewal fees – Fees include a $250 renewal fee and $125 guaranty fund assessment. You can pay using check, card or electronically.
  5. Mail or submit online – Send your renewal application and payment to the commission by mail or submit through their online portal.
  6. Display license – Once approved, you will receive your renewed license certificate by mail. Display this prominently at your place of business.

Your renewed handyman contractor license will be valid for another 2 years from the new expiration date. The commission will send a renewal notice but it is your responsibility to ensure your license does not lapse.

Helpful Renewal Tips

  • Check your license certificate in advance for the expiration date
  • Renew online up to 12 months prior if expires soon
  • Update liability insurance and get new certificate of insurance
  • Pay renewal fees on time
  • Follow up if you don’t receive the renewed license promptly

Reciprocity with Other States

Maryland does not have direct license reciprocity agreements for handymen with other states. To obtain a Maryland handyman license, you must pass the state exam even if you hold a current license in another state like Pennsylvania, Virginia or Delaware.

However, the Maryland Home Improvement Commission may grant you an exam waiver if you:

  • Hold an active handyman or contractor license in another state with equivalent requirements
  • Have at least 3 years of demonstrated experience in the trades
  • Are able to provide sufficient proof of your financial solvency

If you meet these criteria, you can submit a written reciprocity request to the Licensing Unit asking for approval to skip the exam. You must include copies of your current license, resume, and financial records.

If approved for the exam waiver, you can then proceed with submitting the full handyman license application including all documentation, fees and fingerprints. You must still go through the entire application process.

Having an exam waiver simply removes the requirement to pass the Maryland exam. Reciprocal applicants are also subject to the commission’s background checks.

Overall, securing a Maryland license through reciprocity can shorten the process but does not provide full portability of your existing license.

License Bond Requirements

Maryland does not mandate handymen obtain license bonds to qualify for licensing. However, applicants who fail to meet the minimum financial solvency requirements have two options:

  1. Obtain a surety bond – This involves purchasing a $20,000 license bond from an authorized surety company. The bond value required depends on the scope and size of your handyman business. Surety bonds provide financial protection to consumers if the business closes or fails to fulfill contractual obligations.
  2. Submit an indemnitor agreement – If you have a spouse, family member or business partner with strong financial standing, they can sign an indemnitor agreement taking responsibility for claims against the business. This acts as a financial guarantee to the state.

These alternatives demonstrate that you have sufficient financial resources in case of damages, losses or claims even if you lack substantial business assets.

Obtaining a license bond or indemnitor agreement allows applicants who might otherwise be declined for insufficient net worth or income to meet the solvency requirements.

If you pursue either of these options, submit the original bond or agreement along with your license application.

Insurance Requirements

Maintaining proper insurance coverage is mandatory for all active handyman license holders in Maryland. Required policies include:

Liability Insurance

You must carry minimum $50,000 liability insurance to protect against third-party bodily injury and property damage claims. This is required when you:

  • Apply for an original handyman license
  • Renew your handyman license
  • Have an active / current license

Both your original and renewal applications must include proof of liability coverage in the form of a certificate of insurance or other documentation provided by your insurance carrier.

If you plan to discontinue your policy at any time, provide written notice to the commission at least 10 days before the cancellation date. Failure to maintain continuous liability coverage can lead to disciplinary action against your license.

Workers’ Compensation Insurance

If you have any employees as a handyman contractor, Maryland requires you provide statutory workers’ compensation insurance. This provides wage replacement and medical benefits to employees injured on the job.

You must maintain workers’ comp insurance policies with minimum limits mandated by the state. Ask your insurance agent for details based on your payroll and number of employees.

Independent contractors and sole proprietors without employees are exempt from this requirement. But having workers’ comp shows consumers you hold the proper coverage to protect your workers.

Surety Bonds

While license bonds are not mandatory, many handymen take out surety bonds to make their business more attractive to homeowners. A surety bond provides an extra layer of protection if you damage property, fail to finish a project or violate a contract.

These bonds demonstrate you take responsibility for your workmanship and business conduct. Homeowners can file claims against the bond if you cause losses covered under the terms.

Surety bonds are purchased from authorized insurance companies for a premium. The cost depends on the bond amount, your experience and other factors. Most bonds range from $20,000 up to $100,000.

Conclusion

Operating a handyman business legally in Maryland requires obtaining a Home Improvement contractor license and carrying proper insurance. Key steps include proving your qualifications, passing the licensing exam, maintaining active liability coverage and renewing your license biennially.

Becoming properly licensed ensures you have the credentials and expertise to perform quality residential repairs and renovations. It also provides protection for consumers if your work is deficient or causes harm. Renewing on time and keeping insurance active allows you to continue operating your handyman business legally.