You help your buddy out on a weekend.
Fix some wiring. Patch some plumbing. Maybe build a small deck for your cousin. No invoice. No charge. Just being a good guy.
What could go wrong?
Plenty.
Here’s the problem: insurance companies don’t care if you got paid. They care what you were doing.
If you’re a licensed contractor—electrician, plumber, carpenter—you’re still viewed as a professional performing professional work, even if it’s free.
Now let’s look at what happens when something goes sideways:
• The wiring you installed causes a fire
• The pipe you fixed leaks and floods a basement
• Someone gets hurt on something you built
You’d assume one of your policies would step in.
Not so fast.
Your homeowners policy?
Almost always excludes business and professional activities.
Your general liability policy?
It might respond—but if the job wasn’t run through your business (no invoice, no record, off the books), the carrier could argue it’s not part of your insured operations.
That’s where the gap lives.
No charge ≠ no exposure.
In fact, these “favor jobs” are one of the most common ways contractors unknowingly end up uninsured.
The Smart Move
If you’re going to do the work:
• Run it through your business
• Document it (even if you charge $0)
• Make sure it fits your insured operations
• Charge them at a low rate
• Non-Profits donate the money back
Because when something goes wrong,
“I was just helping out” won’t help you much.
Fix some wiring. Patch some plumbing. Maybe build a small deck for your cousin. No invoice. No charge. Just being a good guy.
What could go wrong?
Plenty.
Here’s the problem: insurance companies don’t care if you got paid. They care what you were doing.
If you’re a licensed contractor—electrician, plumber, carpenter—you’re still viewed as a professional performing professional work, even if it’s free.
Now let’s look at what happens when something goes sideways:
• The wiring you installed causes a fire
• The pipe you fixed leaks and floods a basement
• Someone gets hurt on something you built
You’d assume one of your policies would step in.
Not so fast.
Your homeowners policy?
Almost always excludes business and professional activities.
Your general liability policy?
It might respond—but if the job wasn’t run through your business (no invoice, no record, off the books), the carrier could argue it’s not part of your insured operations.
That’s where the gap lives.
No charge ≠ no exposure.
In fact, these “favor jobs” are one of the most common ways contractors unknowingly end up uninsured.
The Smart Move
If you’re going to do the work:
• Run it through your business
• Document it (even if you charge $0)
• Make sure it fits your insured operations
• Charge them at a low rate
• Non-Profits donate the money back
Because when something goes wrong,
“I was just helping out” won’t help you much.