Illinois Contractor License Bond

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What is an Illinois Contractor License Bond?

In the state of Illinois, many types of contractors are required to have a license to do business. When a license is necessary, an Illinois contractor license bond may also be a requirement. An Illinois contractor license bond is a form of security posted by the contractor to ensure compliance with state and local laws in the construction industry.

Three parties are involved in an Illinois contractor license bond agreement: the principal, which is the licensed contractor required to post a bond; the surety company that provides the bond and pays claims on behalf of the contractor; and the obligee which is the state or local authority requiring a bond to be put in place. Claims made against the bond are paid by the surety initially, but licensed contractors repay successful claims.

Which Contractors are Required to Get an Illinois Contractor License Bond?

Under Illinois state law, only licensed plumbers and roofers are required to secure an Illinois contractor license bond. However, other contractors working in the state may be subject to the licensing and bonding requirements put in place by local governments. Some of the more common contractor positions that require a surety bond include:

  • General contractors
  • Commercial contractors
  • Residential contractors
  • Carpentry or structural contractors
  • Electrical contractors
  • Mechanical contractors
  • Heating and air conditioning contractors

To ensure licensing requirements are met on the local level, check with city or county licensing authorities to determine what is necessary to work as a contractor in the area.

Obligee Information for Illinois Contractor License Bonds

Throughout Illinois, contractors may require a license in order to complete projects in compliance with local laws. Cities and counties in the state act as the obligee for Illinois contractor license bonds that may be required as part of the licensing process. For roofers and plumbers, however, there is a statewide requirement for licensing as well as the need to secure an Illinois contractor license bond. The obligee for the statewide bond for Illinois contractors is the Department of Public Health, with the following contact information:

Illinois Department of Public Health

525 W. Jefferson Street

Third Floor

Springfield, Illinois 62761

Phone: 217-524-0791

What Does an Illinois Contractor License Bond Cost?

The Illinois contractor license bond you need varies based on where the work will be performed and the type of license you hold. Limited license contractors require a $10,000 bond, while unlimited contractors may have to post a $25,000 bond. General contractors throughout the state may need a $5,000 to $50,000 bond, depending on local licensing requirements.

Fortunately, you do not pay the entire amount of the bond. Surety companies price Illinois contractor license bonds as a percentage of the total bond requirement, ranging from 1 to 10%. For contractors with strong credit scores, the bond premium is closer to 1 to 3%, while contractors with poor credit pay a higher percentage.

How Do I Get an Illinois Contractor License Bond?

If you are ready to secure an Illinois contractor license bond, you can submit a quote request and short application online. The surety company will review your personal credit details along with your application to determine your bond premium. Once you have this information, you can move forward to finalize the bond.

Illinois Contractor License Bond Renewal and Expiration Date

The renewal terms and expiration dates for Illinois contractor license bonds vary from one jurisdiction to the next, but common time frames for renewal are one or two years. For plumbers and roofers required to have a license and bond on the state level, the expiration date for each bond is September 30, every year. This means the Illinois contractor license bond must be renewed to ensure compliance with state laws. Renewal information along with instructions are sent to bond holders prior to the expiration date.

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Frequently Asked Questions

How much does a bond cost?

Pricing is a percentage of the contractor license bond amount that’s required of you, which is based on your personal credit. Use our bond pricing tool to to get a quick ballpark estimate.

Can I get bonded with bad credit?

Yes. You can apply and get bonded with bad credit. Our agency is the largest writer of bonds in the county, which allows us to approve contractors for bonds when other agencies cannot.

Are these the same as contract bonds?

No. Contractor license bonds ensure you will abide by the laws of your state, city or municipality when performing contracting work. Contract bonds guarantee public projects will be completed properly and are a separate bond type. You can learn more about contract surety bonds by visiting the contractor bond center.

Do I need a state or local bond?

It depends on who is requiring the bond of you, the local municipality, county or state. Depending on your location, it is possible you may need both a local and state bond, as contractor license bond requirements can vary drastically. You can select your state to see a full list of contractor license bond requirements.

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