Starting a handyman business in Tennessee can be a great opportunity for those with construction skills and experience. However, like most states, Tennessee does require licensing for certain larger projects. This comprehensive article will provide a detailed overview of handyman licensing in Tennessee, including how to obtain a new license or renew an existing one. We’ll also cover insurance requirements and options for reciprocity.

Introduction to Handyman Licensing in Tennessee

Handyman services are in increasingly high demand across Tennessee as homeowners look to make renovations, repairs, and improvements rather than move. There is no state-issued handyman license, but many professionals obtain a home improvement contractor license for added credibility and legitimacy with customers.

This license allows handymen to perform services on residential projects valued from $3,000 to $25,000. Anything above $25,000 requires a more advanced general contractor license.

Without any license, handymen can perform general handyman services like basic construction, carpentry, painting, drywall, tile, and general residential maintenance on projects under $3,000 in value.

However, handyman, electrical, HVAC, or any renovation job over $3,000 in value generally requires a state-issued contractor license from the Tennessee Board for Licensing Contractors.

Obtaining the appropriate handyman license ensures you operate legally and gives homeowners confidence in hiring you for bigger projects. It shows you have met experience requirements and passed licensing exams.

This comprehensive guide will walk through the handyman licensing process and requirements step-by-step so you can start or grow your Tennessee handyman business effectively.

Handyman License Requirements in Tennessee

Tennessee has no dedicated “handyman license” – rather, handymen must obtain a home improvement contractor license to perform remodeling and repair work on residential projects valued between $3,000 and $25,000.

For any job over $25,000, a general contractor license would be required. But the home improvement contractor license is sufficient for most handyman projects.

Here are the basic eligibility and application requirements for obtaining this license:

  • Pass the “Business and Law” Exam – All new contractor applicants must pass this exam which covers topics like lien laws, contracting regulations, taxes, labor laws, and more. It’s a multiple choice test administered by PSI Exams.
  • Obtain a Financial Statement – You must provide a financial statement prepared by a licensed CPA showing your business’s financial position. This is used to determine the monetary limit placed on your license.
  • Show Proof of General Liability Insurance – Having active liability insurance is mandatory to protect your business assets from claims related to property damage, injuries, etc.
  • Provide Proof of Workers’ Compensation Insurance – If you have employees, you must carry active workers’ comp to cover workplace injuries.Verify it provides coverage for work performed in Tennessee.
  • Register Your Business Entity – Any LLC, partnership, or corporation must register with the Tennessee Secretary of State to show proper business structure.
  • Submit License Application & $250 Fee – You’ll need to submit the appropriate application forms, documentation, and licensing fee to the state contractor board for review.

These are the baseline requirements for a handyman to obtain a license for projects valued $3,000 to $25,000. Additional requirements related to experience, financial standing, and past conduct may apply in some cases.

We’ll now go over the step-by-step process to obtain or renew a handyman license in Tennessee.

How to Obtain a New Handyman License in Tennessee

Follow these key steps to obtain a new home improvement contractor license, which enables handyman services on projects up to $25,000:

Step 1: Pass the Required Licensing Exams

The state of Tennessee requires all new contractor applicants to pass the “Business and Law” exam administered by PSI Exams. This covers important concepts like:

  • Lien laws
  • Tax laws
  • Labor laws
  • Contracting regulations
  • Business organizations
  • Financial management
  • Accounting principles
  • Bidding and estimating

It’s a vital exam that ensures you understand the essential regulations and business practices for contractors. The exam consists of multiple choice questions.

You can register and schedule your Business and Law exam through PSI’s website. Testing centers are located throughout the state. Thoroughly review the testing bulletin to understand the exam content, format, registration process, and rules.

There is a $55 fee each time you take the Business and Law exam. You must pass this exam before applying for a handyman license.

Some contractor licenses require a trade exam in addition to the Business and Law exam. But the home improvement license just needs the Business and Law test.

Step 2: Obtain a Financial Statement

All contractor license applicants in Tennessee must submit a financial statement prepared by a licensed CPA. This should be either a review or audit of your business’s financial standing.

The state uses your financial statement to determine the maximum monetary limit that will be placed on your contractor’s license. A higher net worth and assets generally equate to a higher allowable contract volume.

Work with a qualified CPA to perform a review or audit and obtain your official financial statement. This should be done as early as possible, since it is a key component of the license application.

Step 3: Acquire the Required Insurance Policies

Active insurance is mandatory to apply for a contractor license in Tennessee. This includes both general liability and workers’ compensation policies.

General liability insurance protects your business against financial loss due to third party property damage or bodily injury claims arising from your work or services. It covers legal fees, settlements, and related expenses up to the policy limits.

Workers’ compensation insurance provides coverage in case any W-2 employees are injured on the job. It pays for medical treatment and reimburses lost wages associated with work-related injuries or illnesses.

Verify that your workers’ compensation policy provides coverage for handyman work performed specifically in Tennessee. This is important for out-of-state applicants.

Take time to carefully shop insurance quotes, as rates can vary widely amongst different providers. Ask about discounts for bundling your general liability with other policies. Industry associations may also offer insurance programs worth exploring.

Step 4: Properly Register Your Business Entity

If operating your handyman services under an LLC, corporation, partnership, or other business entity structure, you must register with the Tennessee Secretary of State.

You can quickly register online and obtain the documentation showing your business is authorized to operate in the state.

Having your business properly registered and in good standing is a prerequisite for contractor licensing.

Print documentation of your active business registration to include with the handyman license application.

Step 5: Submit Your License Application

Once you’ve completed all the steps above, it’s time to submit your physical application for a home improvement contractor license to the state.

Print the appropriate application forms and fill them out fully and accurately. You will need to provide:

  • Owners/officers information
  • Qualifying agent (passed exam) details
  • Financial statement from your CPA
  • Proof of general liability & workers’ compensation insurance
  • Evidence of business registration with the TN Secretary of State
  • Experience affidavits
  • License history and disclosures
  • $250 application fee

Double check that your application is complete with all required elements. Mail it to the state contractor licensing board for processing and review.

Step 6: Allow 4-6 Weeks for Application Review and Approval

It typically takes 4 to 6 weeks for the licensing board to process and approve new handyman license applications. Avoid starting work before you have an approved license in hand.

Some applications may be approved more quickly if there are no issues or missing information. You can also request an expedited “hardship review” in emergency scenarios.

Once approved, you will receive your official home improvement contractor license by mail. You can then legally advertise and perform handyman services on residential projects up to $25,000 in Tennessee.

How to Renew a Handyman License in Tennessee

To maintain an active Tennessee handyman license, you must renew it with the state licensing board every two years prior to expiration. Follow these simple steps:

  • Double check your license card to verify the expiration date. Mark your calendar well in advance.
  • Submit your renewal application online using the state’s CORE system. This should be done at least 30 days before expiration.
  • Pay the $200 license renewal fee. This can be paid online by credit card.
  • Provide updated proof of your general liability and workers’ compensation insurance policies.
  • Disclose any new complaint or disciplinary history that arose over the last renewal period.
  • Print and retain the confirmation of your license renewal once processed.

Meeting these renewal requirements keeps your handyman license valid for another two year period without any exams or continuing education requirements.

Be sure to calendar your expiration deadline so you can renew on time. Renewals can be processed in just a few minutes online by following the steps above.

Reciprocity for Out-of-State Handyman License Holders

Tennessee has handyman license reciprocity agreements in place with several nearby states:

  • Alabama
  • Arkansas
  • Georgia
  • Louisiana
  • Mississippi
  • North Carolina
  • Ohio
  • South Carolina
  • West Virginia

This reciprocity allows for a trade exam waiver if you hold a current, comparable contractor license from one of the states above.

However, you still must take and pass Tennessee’s Business and Law exam even with license reciprocity. And all other TN licensing requirements must be met.

Follow these key steps to transfer your out-of-state handyman license through reciprocity:

  • Verify your home state has a reciprocal agreement with Tennessee. See the list above.
  • Register and pass the required Tennessee Business and Law exam.
  • Submit a complete license application and meet all TN licensing requirements.
  • Include clear proof of your current home state handyman license.
  • Pay the $250 application fee.

Using reciprocity allows you to forgo repeating Tennessee’s practical trade exam. But the Business and Law exam and all other application criteria still apply.

Bond Requirements for Handymen in Tennessee

Home Improvement Licenses require proof of financial responsibility in the amount of $10,000. This can be done through one of the following:

  1. Surety Bond – must have written Power of Attorney attached from the insurance company
  2. Cash Bond
  3. Property Bond
  4. Irrevocable Letter of Credit (ILOC)
  • Bonds and ILOC’s cannot be released for 1 year after being posted.
  • The licensing board may require contractors to submit additional financial information as per the rules and regulations.
  • The license must be issued in the exact legal name and mode of operation as listed on the bond or other financial instrument.

Necessary Insurance Policies for TN Handyman Businesses

As covered earlier, having active insurance is a mandatory requirement for securing and maintaining a contractor license in Tennessee. This includes:

General Liability Insurance – Covers third-party property damage and bodily injury arising from your work. Minimum $100,000 policy but higher limits recommended. State must be listed as the certificate holder. Protects your assets.

Workers’ Compensation – Provides coverage for workplace injuries to employees. Mandatory if you have W2 workers. Verify your policy covers work physically performed in TN.

You must submit proof of current general liability and workers’ compensation (if applicable) insurance with both new applications and renewals. Allowing policies to lapse can lead to license suspension or revocation.

Insurance costs can vary dramatically between providers. Comparison shop for the best rates. Ask about bundling discounts and other ways to maximize savings, like raising deductibles. Industry associations may offer exclusive insurance programs too.

Maintaining active insurance is crucial for all TN handyman businesses. Be sure to work with an agent who understands your needs as a contractor.

Conclusion – Key Takeaways

In summary, while no dedicated handyman license exists, obtaining a Tennessee home improvement contractor license allows you to take on bigger projects legally and with legitimacy.

Major steps for becoming a licensed handyman in TN include:

  • Passing the Business and Law exam
  • Obtaining a CPA financial statement
  • Securing liability insurance and workers’ comp
  • Registering your business entity
  • Submitting a license application & fee

Renewing your handyman license simply requires filing a form and paying $200 every two years. Maintain active insurance policies too.

Consider license reciprocity to potentially waive trade exams if coming from an eligible state.

Following the handyman licensing process shows customers you are a qualified professional while protecting your business interests. Handymen provide invaluable services across TN, and properly licensing your business will set you up for success.