How to Get Illinois General Contractor License

Obtaining a general contractor license in Illinois is a crucial step for anyone looking to perform construction work legally and professionally within the state.

Having a license demonstrates your compliance with Illinois regulations and ensures you meet the necessary standards to operate as a contractor.

This guide will walk you through the process, from understanding the different types of contractor licenses to completing the necessary paperwork and fulfilling insurance requirements.

Let’s jump in!

Significance of understanding state-specific licensing requirements

Knowing state-specific rules and requirements helps ensure compliance with Illinois regulations to:

Protect you from legal issues and fines.
Streamline the licensing process.
Enhance your credibility with clients and customers.

That said, obtaining a general contractor license in Illinois more involves understanding the local licensing requirements, as Illinois does not issue a state-level general contractor license. Instead, licensing is handled at the city or county level, with different requirements based on your location and the type of work you intend to perform.

Illinois offers a variety of contractor licenses to cater to different specialties within the construction industry. These licenses vary based on your county and the type of work you intend to perform, from general contracting to specialized trades.

In Chicago, there are five classes of general contractor licenses, ranging from Class A, which allows for unlimited project values and complex demolition, to Class E, which limits projects to $500,000 and excludes demolition work. Each class has specific insurance requirements and annual fees. Aurora and Rockford have different approaches.

Aurora requires a general contractor license, along with proof of insurance and a registration fee. Rockford, however, does not require a general contractor license but mandates permits for various types of construction projects

Common types of contractor licenses in Illinois include those for:

General contractors.
Plumbing contractors.
Roofing contractors.
Specialty contractors.

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What are the steps to obtain an Illinois general contractor license?

Securing a general contractor license in Illinois involves six steps. Here’s an overview to guide you through the process.

Choose a business entity designation

Selecting the appropriate business structure is a crucial step in establishing your contracting business. Each type of business entity has its implications and benefits.

Limited liability company (LLC): Offers liability protection and tax flexibility.
Corporation: Provides strong liability protection but may involve more complex regulatory requirements.
Sole proprietorship: Simplest form, but the owner is personally liable for business debts.

Choosing the right business structure is essential for your contracting business. Consider factors such as liability, taxation, and administrative requirements to make the best decision.

Register with the department of revenue

Registering with the Illinois Department of Revenue is a necessary step to fulfill your tax obligations and ensure your business operates legally.

Visit the Illinois Department of Revenue website.
Complete the online registration form with your business details.
Submit the required documentation.
Pay the registration fee.
Await confirmation of your registration status in Illinois.

Decide which type of license you need

Choosing the right type of contractor license depends on the scope of work and your specialty areas. Consider the following factors to make an informed decision.

Scope of work: Determine the type of construction work or projects you plan to undertake.
Specialty areas: Identify any specific trades you will be focusing on, such as plumbing or roofing.
License type for general contracting in Illinois: Ensure the license you apply for matches your intended business activities and exact location.

Take the appropriate exam

The examination process for a general contractor license covers various subjects relevant to contracting industries, including construction. Understanding the exam format and passing criteria is essential for success.

Exam subjects: Include building codes, safety regulations, and specific trades.
Format: Typically includes multiple-choice questions and practical assessments.
Passing criteria: Usually requires a minimum score to demonstrate competency.

To best prepare for the exam, seek out educational resources, such as:

Study guides.
Training courses.
Tutorial videos.
Online practice exams.
Educational workshops.

Submit an application

Completing and submitting your license application requires careful attention to detail. Here are the general steps to follow to ensure a successful application process:

Fill out the application form completely.
Gather all required documentation, such as proof of experience and education.
Submit the application form and documents to the licensing authority in Illinois.
Pay the application fee.
Await approval and issuance of your license number in Illinois.

That said, to submit a general contractor license application in Illinois, the process varies depending on the city or county where you plan to operate, as Illinois does not license general contractors at the state level. Below are steps for submitting applications in Chicago and Aurora, two major cities in Illinois.

For Chicago

Obtain and fill out the general contractor application form provided by the City of Chicago’s Department of Buildings.
Include a statement of your financial standing, proof of insurance matching the requirements of the specific license class you are applying for, and copies of necessary government-issued ID.
Submit these documents to Continental Testing Services for processing. The submission can be done by mailing them to Continental Testing Services at P.O. Box 100, LaGrange, IL 60525.

For Aurora

Aurora requires a detailed application that includes all relevant business information and proof that you meet the insurance requirements.
Ensure you have $1,000,000 in total general liability, $500,000 per occurrence, and appropriate workers’ compensation coverage.
Alongside the license application, you must submit a contractor registration application, which includes a $200 fee.
These documents are submitted either online or physically at the city’s Division of Building and Permits located at 77 S Broadway, Aurora, IL 60505.

Common mistakes to avoid during the application process include:

Incomplete forms.
Missing documentation.
Incorrect fee payment.
Not meeting the experience requirements.

Satisfy insurance requirements

Insurance is a critical component of compliance for general contractors in Illinois. Ensuring you meet the insurance coverage standards protects your business and employees.

Liability insurance

Liability insurance is essential for covering any damages or injuries that may occur during construction work.

Required coverage amounts vary based on the scope of work and potential risks. Here are some suggestions for finding insurance providers:

Ask for recommendations from other contractors.
Conduct online research.
Look for businesses specializing in contractor insurance policies.
Consult with insurance agents familiar with the construction industry.

Surety bond

A surety bond guarantees your compliance with state regulations and contractual obligations.

While Illinois does not generally require a state-level contractor license bond, plumbers and roofers are exceptions, as they need to obtain bonds at the state level. Plumbers require a $20,000 bond, and roofing contractors need a $10,000 bond for a limited license or $25,000 for an unlimited one.

For general contractors, bond requirements can range from $5,000 to $50,000 depending on your exact location in Illinois and your scope of the work. The cost of obtaining a surety bond is a fraction of the total bond amount, generally ranging from 1% to 15%, and varies based on your credit score and financial history. Contractors must also renew their bonds periodically to align with their license renewals.

The steps to obtain a surety bond are:

Identify your required bond type: Depending on your profession or business activity in Illinois, determine the type of surety bond you need. This could be a contractor license bond, motor vehicle dealer bond, or another type required by state or local law.
Find a surety bond provider: You can apply for a surety bond through licensed bond companies that operate in Illinois. Providers like Viking Bond Service offer detailed guidance on Illinois-specific requirements and have systems tailored to the state’s bonding needs.
Complete the application: Submit a bond application, which may be available online for convenience. This application will require details about your business and the bond required. Illinois often has specific forms and documentation that must be completed accurately to avoid delays.
Undergo evaluation: The surety company will evaluate your application based on the risk associated with bonding your business. This includes a review of your financial history and credit score. For Illinois, certain bonds might also require additional financial disclosures or compliance checks with state regulations.
Receive your quote and pay premium: Once your application is reviewed and approved, you’ll receive a quote for the bond premium. This premium is a percentage of the bond amount, and payment terms can vary based on your financial standing and the bond’s risk.
Bond issuance: After payment, the surety company issues the bond. This bond is then filed with the Illinois agency requiring it, validating your compliance with state or local mandates.
Maintain and renew the bond: Illinois surety bonds typically require renewal to remain valid. The renewal process might involve demonstrating continued compliance with financial standards and any regulatory changes.

Workers’ compensation insurance

Workers’ compensation insurance is mandatory for contractors with employees, providing coverage for work-related injuries and illnesses.

Securing workers’ compensation insurance in Illinois involves several clear steps:

Determine the requirements: Almost all employers in Illinois are required to provide workers’ compensation insurance for their employees. This includes full-time, part-time, and even family members employed by the company, with very few exceptions.
Choose an insurance provider: You can purchase workers’ compensation insurance from licensed insurance companies, through a broker who specializes in business insurance, or via the Illinois assigned risk pool if you cannot find coverage from private insurers. The latter is often used as a last resort and tends to be more expensive.
Purchase the policy: Once you choose a provider, you need to apply for and purchase the insurance. Ensure that the coverage details align with the Illinois Workers’ Compensation Act requirements, covering medical expenses, lost wages, and rehabilitation costs for injured employees.
Maintain compliance: Regularly review and update your insurance policy to ensure continuous compliance. You must also display a poster in your workplace that informs employees of their rights and the coverage available under workers’ compensation insurance.
Manage claims and disputes: If an employee is injured, they should report the injury to you, and you must then notify your insurer. If disputes arise about the insurance claims, you may need to engage with the Illinois Workers’ Compensation Commission or the Illinois Department of Insurance for resolution.
Understand penalties for non-compliance: Failing to carry workers’ compensation insurance can lead to severe penalties, including fines up to $500 per day of noncompliance, with a minimum fine of $10,000. In severe cases, corporate officers may face criminal charges.

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Does the state of Illinois offer a general contractor license?

Illinois does not offer a state-level general contractor license. However, licensing requirements vary by jurisdiction. With that in mind, it’s crucial to check with local authorities for specific regulations. It’s important to note:

Some localities may recognize licenses from other states.
You must understand your local licensing requirements to maintain compliance.

Who needs a contractor license in Illinois?

These projects in Illinois require contractors to hold a valid license state-wide.

Plumbing work.
Roofing projects.

While Illinois does not have a state-wide license requirement for general contractors, many local jurisdictions, such as the City of Chicago, require licenses for general contracting work, especially for building construction, alteration, repair, and demolition. Similarly, licensing for specialty trades like electrical contracting is generally handled at the local level.

What are the requirements to become a general licensed contractor in Illinois?

Before applying for a general contractor license in Illinois, ensure you meet the general prerequisites.

Typically, the minimum age requirement is 18 years old for required contracting licenses.
Proof of relevant educational background or training.
Some local jurisdictions might require demonstrated experience in the construction industry.
Evidence of legal residency may be required, particularly if the licensing is handled by a state agency, as seen with trades like roofing or plumbing

Key takeaways

Now that you know how to get Illinois general contractor license access, your next step is to study up and earn your license! Remember to:

Comply with Illinois licensing regulations to operate legally.
Ensure you meet all the requirements before applying.
Stay updated on any changes in licensing requirements to maintain your license.