Iowa Plumber and Mechanical Contractor Bond: A Comprehensive Guide
December 4th, 2020
This guide provides information for insurance agents to help contractors on Iowa Plumber and Mechanical Contractor bonds
At a Glance:
- Average Cost: $100 per year
- Bond Amount: $5,000
- Who Needs It: All individuals and businesses that act as plumbers and mechanical contractors in the State of Iowa
- Purpose: To ensure the public will receive compensation for any damages should the contractor fail to comply with contractor licensing law
- Who Regulates Plumbers and Mechanical Contractors in Iowa: The Iowa Plumbing and Mechanical Systems Board (PMSB)
Background
Iowa Code 105.10 requires plumbers and mechanical contractors operating in the state to obtain a license with the PMSB. The Iowa 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 purchase and maintain a $5,000 contractor license surety bond to be eligible for licensure.
What is the Purpose of the Iowa Plumber and Mechanical Contractor Bond?
Iowa requires plumbers and mechanical contractors to purchase the Plumber and Mechanical Contractor Bond as part of the application process for the Plumber or Mechanical 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 Iowa Plumber and Mechanical Contractor Surety Bond?
BondExchange makes obtaining an Iowa Plumber and Mechanical 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 ensure 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 Iowa Plumber and Mechanical Contractor Bond?
Credit checks are not required for the Iowa Plumber and Mechanical Contractor bond.
How Much Does the Iowa Plumber and Mechanical Contractor License Bond Cost?
The $5,000 Iowa Plumber and Mechanical Contractor surety bond costs $100 per year
How Does Iowa Define “Contractor”
Iowa Code 105.2 defines a contractor as “a person or entity that provides plumbing, mechanical, HVAC, refrigeration, sheet metal or hydronic systems services on a contractual basis and who is paid a predetermined amount under that contract for rendering those services.”
How Do Plumbers and Mechanical Contractors Apply for a License in Iowa?
Plumbers and mechanical contractors in Iowa must navigate several steps to secure their contractor license. Below are the general guidelines, but contractors should refer to the Licensing Statutes for details on the process.
License Period – All Iowa Plumbing and Mechanical Contractor Licenses have a three-year renewal period. All licenses that have been issued or renewed after May 1, 2020, will expire on June 30, 2023.
Step 1 – Determine the Trade Type
Iowa requires contractors to obtain specific licenses corresponding to the nature of the applicant’s business. Below is the different trade classifications of the Iowa Plumbing and Mechanical Contractor License:
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- Plumbing – Performs contract work as a plumber
- HVAC/R – Performs contract work pertaining to heating, ventilation, air conditioning, ducted systems, and refrigeration
- Hydronics – Performs contract work pertaining to a heating or cooling system that transfers heating or cooling by circulating fluid through a closed system. For example, a boiler or pressure vessel would meet this description.
- Mechanical – Contractors who perform any combination of HVAC, sheet metal, and hydronic systems work
Step 2: Determine the License Level
Iowa requires contractors to obtain specific licenses corresponding to the applicant’s level of experience. Below are the different levels of the Iowa Plumbing and Mechanical Contractor License:
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- Helper – Performs general manual labor, must be supervised by an apprentice, journeyperson, or master
- Apprentice – Is currently enrolled in an accredited apprenticeship program and whose work is supervised by either a journeyperson or master
- Journeyperson – Performs contract work for the company, is supervised by a master
- Must have either completed a 42-month apprenticeship program or have at least 4 years of direct work experience
- Master – The highest level of licensure, supervises all company employees, and is directly involved in the planning and superintending phases of all projects
- Must have been licensed as a journeyperson for at least 2 or years or have been licensed as a master in another state
All contractor companies will need to employ at least one licensed master at all times. Contractor companies who do not employ at least one licensed master will not be permitted to perform contract work.
Step 3 – Purchase Insurance
All contractors must purchase and maintain liability insurance with a minimum limit of $500,000. Contractors with employees must also purchase and maintain worker’s compensation insurance. Contractors applying for a license as an employee must submit proof that their employer has purchased liability insurance.
Step 4 – Purchase a Surety Bond
Contractors must purchase and maintain a $5,000 plumber or mechanical contractor surety bond. Contractors applying for a license as an employee must submit proof that their employer has purchased the surety bond.
Step 5 – Complete the Application
All plumber and mechanical contractors regulatory license applications should be mailed to:
Iowa Plumbing and Mechanical Systems Board
Iowa Dept. of Public Health
321 E 12th Street
Des Moines, Iowa 50319
Contractors can access the application packet here.
Step 6 – Pay Fees
The application fees for the plumber and mechanical contractors license differ depending on when the contractor submits their application. The blow table was take from the application form and outlines the fee structure for the Iowa plumber and mechanical contractor license:
| Date the Application is Submitted | Application Fee |
|---|---|
| 7/01/2020 – 12/31/2020 | $425 |
| 1/01/2021 – 6/30/2021 | $358.50 |
| 7/01/2021 – 12/31/2021 | $291.75 |
| 1/01/2022 – 6/30/2022 | $225 |
| 7/01/2022 – 12/31/2022 | $158.25 |
| 1/01/2023 – 6/30/2023 | $91.75 |
Step 7 – Pass the Exam
Contractors applying for a journeyperson or master license will need to pass an exam before being issued their license. They will need to submit a separate exam application and pay a $35 fee prior to taking the exam. Applicants can learn more about the exam requirements here.
How Does an Iowa Plumber or Mechanical Contractor Renew Their License?
The Iowa Plumber and Mechanical Contractor License can be renewed online here. The renewal fees can be complicated to calculate, fortunately, the PMSB offers a simple fee calculator which contractors can access here. Contractors will also need to take a certain amount of continuing education hours dependent upon their license type. Contractors can access a full list of all of the continuing education requirements here.
What Are the Insurance Requirements for the Iowa Plumber and Mechanical Contractors License?
The State of Iowa requires contractors to obtain public liability insurance with a minimum limit of $500,000. Contractors who have employees will also need to obtain worker’s compensation insurance. Contractors file a $5,000 plumber and mechanical contractor surety bond.
How Do Iowa Contractors File Their Bond With The Iowa PMSD?
Contractors should mail the completed bond form, including the power of attorney, to the following address:
Iowa Plumbing and Mechanical Systems Board
Iowa Dept. of Public Health
321 E 12th Street
Des Moines, Iowa 50319
The plumber and mechanical 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:
- The legal name of the entity/individual(s) buying the bond
- Surety company’s name
- Date the bond goes into effect
- Date the bond is signed
How Can Iowa Contractors Avoid Bond Claims?
To avoid claims on the Plumber and Mechanical Contractor Bond, contractors must follow all license regulations in the state, including some of the most important issues below that, tend to cause claims:
- Do not use untruthful and misleading statements in any advertisements
- Do not misrepresent your skill and abilities
- Be truthful on all license and renewal applications
What Other Insurance Products Can Agents Offer Contractors in Iowa?
Iowa requires contractors to obtain general 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 any form of 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 Iowa Contractors?
Iowa conveniently provides a public database to search for active construction contractors in the state. The database can be accessed here.
Contact BondExchange for additional marketing resources.
