Determining the appropriate risk classification is critical to ensuring your clients have the protection they need.  Unfortunately, there can be challenging overlaps in job duties – particularly in the home repair department.  Here are five quick tips to determine if you need to classify your clients as a general contractor, remodeler, or handyperson:

  1. Do they have a specific trade license, such as electrician or plumber?  A handyperson generally doesn’t have a specific license, whereas a remodeler or general contractor does.

  2. How much are their annual sales?  A handyperson is typically involved in small residential projects with gross sales of less than $1,500 per project and rarely involved in commercial work.  Remodelers have gross sales of $1,500 per project.  Since general contractors are generally involved in ground up construction or remodeling, gross sales are much larger.

  3. Do they have full time employees or use subcontractors?  A handyperson generally has a maximum of two employees.  Remodelers will have more than two employees plus the owners, and in some cases subcontract out some of the work.  General contractors frequently subcontract out 100% of their operations and will have clerical employees in addition to the owners.

  4. Are their projects new construction?  Your handyman is not going to be doing new construction work.  A remodeler might be involved in new construction if they are hired for an addition to an existing building. A general contractor is frequently working on new construction.

  5. Are they working on roofs?  A handyman will only be involved with some patching repairs that may occur in tandem with non-roofing work on a project.   A remodeler will provide roofing services as part of a remodel or repair project, which will require separate classification.  General contractors provide roofing services that are part of a subcontracted operation, or is separately classified.

It is challenging to keep up with the ever-changing underwriting guidelines and classification requirements.  MJ Kelly’s Property and Casualty Department is here to help.  We have the markets access and underwriting expertise to set you and your clients up for success!