Want to go out on your own as a general contractor in Vermont? Here’s what you need to know.
In a perfect world, setting up a new business would be as easy as coming up with a name and watching the customers roll in. Starting your handyman business will require a little more elbow grease than that, but we know you can handle it. One of the first items to get sorted is getting your Vermont contractor license.
Contractor licenses - what are they good for? Licensure laws regulate an industry in a state to protect both customers and contractors. Getting a license usually involves proving experience, passing an exam, and undergoing a criminal record check. These steps make sure that not just anybody can start working on complex projects.
Business licenses also make it easier for states to reprimand shady contractors that commit fraud. This regulation, in turn, creates a safer and more productive competitive environment. Licenses also give contractors lien rights that ensure payment.
In addition to contractor licenses, states usually require business insurance. If an accident happens on the job, general liability insurance remedies the situation without your bank account taking a hit. The average property damage claim is $30,000, and I don’t know any small business owners who wouldn’t rather keep that money in the business.
You may need to show proof of business insurance to get your license.
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Ready to get down to business? Here are the steps to follow to get your Vermont contractor license.
Each state makes the business licensing rules on their home turf, with local jurisdictions sometimes pitching in their own regulations as well. In Vermont’s case, they draw a distinction between general and specialty contractors.
For general contractors:
There are currently no state-level requirements or licensing for general contractors. This means that if you work on construction or home improvement projects, you don’t need to apply for a license to set up your business. It’s always a good idea to check with your local government to make sure your town doesn’t have additional regulations. Also, keep in mind that just because you don’t need a license doesn’t mean you don’t need anything to get started. We’ll cover what you should do to set up your business below.
For specialty contractors:
While the broader umbrella of “general contracting” doesn’t have licensing requirements, specialty skills require a Vermont contractor license. The businesses that need licensing and certification are:
The licensing process will be nearly identical between specialties, but the exact experience and exam requirements will vary. Don’t worry, we’ll cover what to expect further down.
Let’s say the work you want to do falls under the “general contracting” term and you’ll never work on any specialty projects. Do you get to pass go and start handing out business cards? Not quite. There are still a few “must-haves” and “nice-to-haves.”
First of all, you still need to register your business. This includes setting up a business structure, like an LLC, registering a trade name, and getting your Employer Identification Number for taxes. If you have employees, you’ll also need to register for unemployment and worker’s comp.
After completing the mandatory business admin, you may choose to get business insurance. The state isn’t requiring you to get coverage, but having insurance can help you:
Finally, the work you do may warrant a permit. If you’re unsure, it’s always best to check with your jurisdiction.
Hey specialty contractors, this section is for you! Here’s what to expect and have ready when applying for a Vermont contractor license for work such as plumbing or electrical.
Choosing a license level. Most specialty contract licenses in the state have levels based on experience, such as a journeyman or master. Different license levels come with their own experience requirements and fees.
Proof of education and experience. Specialty jobs like being an electrician can be dangerous if you don’t know what you’re doing. That’s why you’ll need to show proof of past education or work experience. Some licenses require degrees or certificates from approved institutions, while others need a signed employer affidavit of experience.
Continuing education. Vermont doesn’t have exam requirements to obtain a contractor license, but continued education is required. Each license period, usually one to three years, you need to take approved classes or attend seminars.
Applicant’s statement. Each contractor license applicant must fill out a form detailing any fines or taxes they may owe to the state. The applicant statement asks about child support, taxes, unemployment compensation, and other penalties or fines.
Application and fee. Each specialty has its own application form and fee schedule. Fees vary by specialty, license level, and whether it’s a new or renewing license.
Electricians who want to earn a Vermont contractor’s license will choose from three levels: specialist, journeyman, or master. They each require a $115 application fee with licenses to be renewed every three years.
Applicants for each license level have a few options for meeting experience requirements. For example, specialists can prove either completion of an approved training program and a year of experience or two years of experience and no formal training. Reciprocal licenses are also available for journeyman and master level licenses, which allow you to also work in New Hampshire or Maine.
The final piece of successfully submitting your license application is sending it in time for a Division of Fire Safety’s board meeting. Applications must be postmarked two weeks before the next meeting to be promptly reviewed.
If you’re a plumber in Vermont who wants to get licensed, you have four application types to choose from. The license level you qualify for depends on your experience level, ranging from limited licensures for specialists up to master licenses. New plumbing specialists have two license types to choose that cover either water heaters and heating systems or water treatment projects.
Application fees for plumbing licenses range from $50 to $120, and applications must be submitted two weeks before the next Division of Fire Safety board meeting. Your submission is reviewed by board members, and failure to get the information to them early enough means your approval will get bumped to the next meeting. Once you receive your license, you’ll need to keep your knowledge fresh with continuing education courses.
If you still have some Vermont contractor license questions unanswered, check out the Department of Public Safety's website.
If you still need to get general liability and worker’s comp insurance before you can apply, get a contractor's insurance quote to ensure you’re covered.
Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on Q1 2020 data of 10% of our total policies sold.
I'm a freelance writer who has always had an interest in entrepreneurship, starting way back with lemonade stands. These days I write to help business owners with their everyday challenges and choices. When I'm not typing away, you'll find me eating pizza, volunteering at the animal shelter, or taking too many pictures of my cats.
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
28 November 2018 • 6-minute read
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