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Each US state has varying laws governing the various aspects of a contracting business. Since general contractors also fall into this category, the requirements for obtaining a general contractor license also will differ from state to state.
When it comes to Illinois, the state law does not regulate general contractor licenses. Cities and counties regulate themselves. Depending on the place where the general contractor lives and works, the laws may be different.
Read on to find out what the Illinois General Contractor License and Insurance Requirements are.
License Requirements for Chicago
In Chicago, the largest city in the state of Illinois, obtaining a general contractor license requires filling in an application that needs to be sent by mail to the City’s Department of Buildings with accompanying proof of insurance attached.
Depending on the type of license required, you will need to pay an additional fee. For example, if you need a Class E license, which covers working on contracts lower than $500,000, a fee of $300 is required.
If require a Class A license, which covers working on all types of projects, the fee will be $2,000.
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Insurance Policies and Requirements
Even though not all cities and counties in the US require proof of insurance, it’s best to invest in one. Working as a general contractor entails being on a construction site every day where unforeseen events can occur. Being uninsured means risking everything.
Another critical issue to consider is the difficulty of getting hired if you have no insurance. It can prove almost impossible and most of the time a client will want to know if you are insured or not.
Business insurance is a safety measure both for the client and for the general contractor.
What Type of Insurance is Mandatory?
When it comes to running a business that employs staff, the state requires you to take out workers’ compensation insurance. This is mandatory for everyone running a business.
This is where your employees are covered for medical expenses, compensated for injuries, receive a salary during their recovery period, and are covered for lawsuits related to the workplace.
Over and above this, the State of Illinois does not require any additional insurance plan. Still, a reputable company will have a contractors’ general liability insurance plan in place. This insurance safeguards your business against individual claims by a client or third party.
Obtaining General Liability Insurance is a Smart Move
Contractors can often make unintended mistakes on the job. With a general liability insurance plan, you are covered for bodily injury, property damage, personal injury, and marketing damages.
Strict but Fair License and Insurance Requirements
The Illinois law on contractors provides strict, but fair insurance requirements. The onus falls on you to ensure that you are comprehensively covered for all eventualities.
