Operating a handyman business in Utah requires following proper licensing and insurance regulations. This ensures handymen have the qualifications to safely perform repair and improvement tasks while protecting the interests of customers.

This resource provides an in-depth overview of Utah’s requirements for handymen and handyman businesses related to:

  • General license rules
  • Obtaining a new license
  • Renewing a license
  • Reciprocity
  • Bonds
  • Insurance

Introduction

In Utah, handyman projects that are worth less than $3,000 qualify for what’s commonly known as the handyman exemption. This allows handymen to perform small home repairs and improvements without needing a full contractor license.

However, some licensing and insurance requirements still apply:

  • For projects worth less than $1,000, handymen do not need any license or insurance.
  • For projects worth $1,000-$3,000, handymen must file an affirmation of exemption with the Utah Division of Occupational and Professional Licensing (DOPL). They must also show proof of general liability insurance.
  • For projects worth more than $3,000, a full specialty contractor license issued by DOPL is required.

Properly following these rules ensures handymen have the skills needed for larger jobs, while also protecting homeowners. Failing to adhere to the requirements can result in fines or inability to operate until coming into compliance.

New Handyman License Requirements

Handymen in Utah needing to complete projects valued from $1,000-$3,000 must register for an exemption with DOPL. Here are the detailed steps:

1. Establish Eligibility

To qualify for the handyman exemption in Utah, you must meet all of these criteria:

  • Be an individual operating as a sole proprietor. If you’ve established an LLC, partnership or corporation, you do not qualify.
  • Only perform projects less than $3,000. This includes parts and labor combined. If you believe a job may go over $3,000 due to unforeseen complications, do not take the risk.
  • Have no employees. You can hire subcontractors, but absolutely no W-2 employees. If you need employees, a full contractor license is required.

You are not eligible for the handyman exemption if any of the following apply:

  • You want to advertise or operate under a business name. For example, “Bob’s Handyman Service”. Doing business under anything other than your personal name requires a contractor license.
  • You plan to hire employees now or anytime in the future. If employees are a possibility, it’s best to get the full contractor license upfront.
  • You will perform jobs valued higher than $3,000. Even if most jobs are smaller, doing any tasks over the limit disqualifies you from the exemption.
  • Your business is structured as anything besides a sole proprietorship. LLCs, partnerships, corporations and other entities all require a contractor license.

If any of those disqualifying factors apply, you must get a full specialty contractor license instead. There are no exceptions if you want to legally and safely operate in Utah.

2. Submit Registration Forms and Fees

To register for the handyman exemption, you must submit the following forms and fees to the DOPL:

  • Handyman Registration Application: This provides your business and contact details to the state. double check all information is accurate and legible before sending. The application fee is $37.
  • Handyman Affirmation of Exemption: This 1-page form confirms to the state that you agree to abide by the handyman license rules. Namely, that you will only perform projects less than $3,000 and have no employees. Do not sign this unless you can fully comply. There is no additional fee.

You can mail paper forms with a check or money order to DOPL. However, most handymen today register online through DOPL’s portal. This allows paying the $37 fee via credit card.

It’s also faster and you can track the status of your application. Expect it to take 4-6 weeks for DOPL to process and approve your handyman registration.

3. Provide General Liability Insurance

An important requirement when registering is submitting proof of your general liability insurance coverage. The state mandated minimums are:

  • $100,000 coverage per incident
  • $300,000 aggregate coverage

You must have an active insurance policy at the time of registration, and list the Division of Occupational and Professional Licensing as a certificate holder. This ensures they are notified of any policy changes or cancellations.

Typical insurance costs for meeting Utah’s handyman exemption requirements run $300-$800 per year. Rates vary based on your location in the state, the type of work you do, and other risk factors assessed by the insurer.

Shop around between a few providers to compare rates. But make sure the policy meets Utah’s minimum requirements before registering. Failing to maintain active insurance can lead to fines and license revocation.

Renewing a Handyman License in Utah

Utah handyman licenses expire every two years on November 30. For instance, licenses issued in December 2022 will expire on November 30, 2024.

To renew an active handyman license, you must submit:

  • Completed Handyman Renewal Application: This can be found on the DOPL website or mailed to your business ahead of expiration. Ensure all business information is still accurate.
  • $37 Renewal Fee: Payable via check or online portal. Keep your receipt as proof of payment.
  • Updated Liability Insurance Certificate: Your insurer can provide a new certificate showing continuous coverage. Again, DOPL must be the certificate holder.

You can renew online, by mail, or in-person at the DOPL office. Just be sure to start the process 4-6 weeks before your handyman license expires. This ensures no lapse in legal operating status.

Unlike contractors, handymen in Utah do not need to complete any continuing education credits to renew their license. The only requirements are submitting the application, fee, and insurance paperwork on time.

If your handyman license in Utah does accidentally lapse, you must cease all operations until the license is reinstated. Backdated renewals are not permitted.

Reciprocity for Out-of-State Handymen

Does Utah offer license reciprocity for handymen registered in other states? Unfortunately, the answer is no.

Utah does not have full universal reciprocity for contractors or handymen with any state. However, they do offer a path to licensure by endorsement. This requires:

  • 1 full year of handyman experience in another U.S. state or territory. This must meet Utah’s scope of practice rules.
  • Hold a current active handyman license in that other state. Cannot be expired or inactive.
  • Pass Utah’s handyman license exam. Testing fees and an appointment will be required.
  • Pay all normal Utah registration fees as if applying for a new license.
  • Provide current certificate of insurance meeting Utah’s requirements.

In total, expect reciprocity by endorsement in Utah to take 6-8 weeks to fully process and approve. The application is also only valid for 1 year before expiring.

Some neighboring states like Arizona and Nevada do have streamlined reciprocity through an agreement called the Western Regional Master Contractor Coalition (WRMCC). Handymen already licensed in those states may have an easier time transferring to Utah.

But for everyone else, be prepared to go through Utah’s endorsement process if relocating from another area. All requirements must be met to legally operate in the state. Out-of-state experience does count toward Utah’s mandatory 1 year minimum though.

Bond Requirements for Utah Handymen

Does Utah require handymen to obtain any license bonds to operate legally? Thankfully, the answer is no.

Utah instituted its insurance requirements for handymen in lieu of mandatory bonding. As long as you maintain the prescribed liability insurance, bonds are not necessary. This helps keep overhead costs low for sole proprietors.

However, contractors licensed to perform projects above $3,000 do face stricter financial responsibility rules:

  • Higher minimum insurance coverage is required starting at $300,000.
  • Bonds may be required and may increase based on the size of the project. Residential contractors and small commercial contractors need a minimum $25,000 bond.

But fortunately, registered handymen dealing with smaller home tasks can focus just on general liability insurance. Just make sure to consult your specific county or city clerk, as local jurisdictions sometimes require bonds for permits.

Insurance Requirements

Let’s summarize the key insurance requirements for handymen in Utah again:

Less than $1,000:

  • No insurance proof required

$1,000 to $3,000:

  • Must have active general liability insurance
  • Minimum $100,000 per incident
  • Minimum $300,000 aggregate coverage
  • Utah DOPL must be certificate holder

Over $3,000:

  • Requires full contractor license
  • Higher insurance minimums apply

For jobs up to $3,000, general liability insurance costs for Utah handymen typically fall between $300-$800 per year. Exact rates depend on factors such as:

Location – Urban areas like Salt Lake City may have higher premiums than rural towns. Compare quotes between regions.

Number of Projects – Doing 50 small tasks per year represents more risk than 5 jobs. Your insurer calculates rates based on projected job volume.

Work Type – Some high-risk trades like electrical or handyman may have higher premiums. Roofing and tree removal also often cost more to insure.

Employees – Having W-2 employees adds liability over just subcontractors. Remember that employees require a full contractor license.

State Requirements – Utah’s minimum liability coverage is lower than many states. But each area sets their own insurance rules.

Provider – Each insurance company calculates premiums differently. That’s why checking several providers often reveals a range of potential rates.

To save money on handyman insurance in Utah, consider:

  • Comparing quotes from 5-10 providers
  • Offering preferred rates for customers that pay a lump sum upfront rather than financing
  • Completing continuing education classes related to safety and risk reduction
  • Inspecting every job site before starting work for potential hazards
  • Keeping detailed records of income sources and jobs completed for tax purposes
  • Asking about bundling business insurance products together for a discount

Following these tips can help Utah handymen secure liability insurance that meets state requirements, while keeping premiums as affordable as possible.

Conclusion

While allowing handymen to operate without a contractor license, Utah does impose regulations through its handyman exemption program. Key requirements to legally operate include:

  • Only performing projects valued under $3,000
  • Registering as a sole proprietor with the state’s DOPL
  • Maintaining continuous liability insurance
  • Renewing the handyman license every 2 years
  • Passing Utah’s exam and registering as a new candidate if relocating from out-of-state

Properly meeting these rules ensures handymen only complete tasks matching their qualifications. Homeowners can also feel confident hiring exempt handymen knowing they are insured and licensed.

Handymen with questions about Utah’s licensing or insurance requirements should contact the Division of Occupational and Professional Licensing. Their staff can clarify the latest rules and help handyman businesses remain compliant when serving customers. Doing so prevents costly fines or other penalties down the road.