Illinois Plumbing Contractor Bond: A Comprehensive Guide

February 9, 2021

This guide provides information for insurance agents to help contractors on Illinois Plumbing Contractor bonds

At a Glance:

• Average Cost: $100 per year
• Bond Amount: $20,000
• Who Needs It: All individuals and business entities seeking to obtain a Plumbing Contractor License in the State of Illinois
• Purpose: To ensure the public will receive compensation for any damages should the contractor fail to comply with contractor licensing law
• Who Regulates Plumbing Contractors in Illinois: The Illinois Department of Public Health (IDPH)

Background

Illinois Compiled Statutes Section 894.20 requires plumbing contractors operating in the state to obtain a license with the IDPH. The Illinois legislature enacted licensing laws and regulations to ensure that contractors engage in ethical business practices. In order to provide financial security for the enforcement of the license law, contractors must post a cash deposit or purchase and maintain a $20,000 plumbing contractor surety bond to be eligible for licensure.

What is the Purpose of the Illinois Plumbing Contractor Bond?

Illinois requires contractors to purchase the Plumbing Contractor Bond as part of the application process to obtain the Plumbing Contractor License. The bond ensures that the public will receive compensation for financial harm if the contractor fails to comply with the licensing regulations. In short, the bond is a type of insurance that protects the public if the contractor breaks licensing laws.

How Can an Insurance Agent Obtain an Illinois Plumbing Contractor Surety Bond?

BondExchange makes obtaining an Illinois Plumbing Contractor Bond easy. Simply login to your account and use our keyword search to find the “contractor” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

Is a Credit Check Required for the Illinois Plumbing Contractor Bond?

No, a credit check is not required for the Illinois Plumbing Contractor Bond. Because this bond is considered relatively low-risk, the same low rate is offered to all contractors in Illinois.

How Much Does the Illinois Plumbing Contractor Bond Cost?

The $20,000 Illinois Plumbing Contractor Bond costs just $100 per year

How Does Illinois Define “Plumbing Contractor”?

To paraphrase Illinois Administrative Code Section 894.10, a plumbing contractor is any individual who alters, repairs, or installs plumbing fixtures as an independent business.

How Do Plumbing Contractors Apply for a License in Illinois?

Contractors in Illinois must navigate several steps to secure their plumbing contractors license. Below are the general guidelines, but contractors should refer to the application form for details on the process.

License Period – The Illinois Plumbing Contractor License expires on April 30 of each year and must be renewed before the expiration date. Initial licenses issued after January 1 will expire on April 30 of the following year

Step 1 – Form a Business Entity

Illinois requires plumbing contractors to obtain specific licenses corresponding to the nature in which the contractor’s business operates (corporation, sole proprietor, LLC, etc). Contractors can register their business entity with the Illinois Department of Revenue here 

Step 2 – Purchase Insurance

Plumbing contractors must purchase and maintain liability insurance with a minimum limit of $300,000. Additionally, contractors with employees must also purchase workers’ compensation insurance with a minimum limit of $500,000

Step 3 – Purchase a Surety Bond or Deposit Cash

Plumbing contractors must deposit cash or purchase and maintain a $20,000 plumbing contractor surety bond

Step 4 – Complete the Application

All regulatory license applications should be mailed to:

Illinois Department of Public Health
Plumbing Program
525 W. Jefferson St., 3rd Floor
Springfield, IL 62761

Contractors must pay a $150 fee when submitting their license application

How Does an Illinois Plumbing Contractor Renew Their License?

Contractors must mail their renewal application, including the $150 renewal fee, to the following address:

Illinois Department of Public Health
Plumbing Program
525 W. Jefferson St., 3rd Floor
Springfield, IL 62761

The Illinois Plumbing Contractor License expires on April 30 of each year and must be renewed before the expiration date. Initial licenses issued after January 1 will expire on April 30 of the following year.

What Are the Insurance Requirements for the Illinois Plumbing Contractors License?

The State of Illinois requires Plumbing contractors to obtain liability insurance with a minimum limit of $300,000. Additionally, contractors with employees will also need to obtain worker’s compensation insurance. Contractors must deposit cash or purchase and maintain a $20,000 plumbing contractor surety bond.

How Do Illinois Plumbing Contractors File Their Bond With The IDPH?

Contractors should mail the completed bond form, including the power of attorney, to the following address:

Illinois Department of Public Health
Plumbing Program
525 W. Jefferson St., 3rd Floor
Springfield, IL 62761

The plumbing contractor surety bond requires signatures from both the surety company that issues the bond and the contractor. The surety company should include the following information on the bond form:

• Legal name, license type, phone number and address of the entity/individual(s) buying the bond
• Surety company’s name, address, and phone number
• Bond amount
• Date the bond is signed and goes into effect
• Notary signatures

What Can Contractors Do to Avoid Claims Against the Illinois Plumbing Contractor Bond?

To avoid claims on the Plumbing Contractor Bond, contractors must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:

• Pay all laborers and employees
• Pay all taxes and contributions due to state and local municipalities on time and in full
• Pay suppliers for all materials and equipment
• Abide by contracts and repair improper or negligent work

What Other Insurance Products Can Agents Offer Contractors in Illinois?

Illinois requires plumbing contractors to obtain liability insurance. In addition, contractors with employees will have to purchase workers’ compensation insurance. Bonds are our only business at BondExchange, so we do not issue liability or workers’ compensation insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Illinois Plumbing Contractor Customers?

Illinois conveniently provides a public database to search for active plumbing contractors in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.