Building a Sturdy Business
Business Licenses and Permits for Contractors, Builders & Other Construction Professionals

As a construction or contracting professional, you know that running your business means jumping through some regulatory hoops. You need licenses and permits from the city or state to prove to your clients that you're responsible and qualified to do the work. But what you may not know is that you can be fined for operating without the appropriate licenses or permits, depending on where you live and your industry.

Licenses and permits are part of the trifecta of being "licensed, bonded, and insured," the three necessities of a professional and credible construction business. This trifecta is important not only for addressing contractor liability, but also for legally operating as a construction business in most states and cities.

Additionally, many clients will require you to have certain licenses and permits before offering you any contracts, for quality-assurance reasons and to limit their liability.

Let's take a look at how you can comply with state and local licensing laws.

When Does Your Construction Business Need to Be Licensed?

When Does Your Construction Business Need to Be Licensed?

Licenses are usually industry-dependent and awarded to businesses that can demonstrate that they are qualified and knowledgeable about the work they're doing. That may mean that you must pass exams before you can get your license.

Licenses exist and are required for all sorts of contractors, including…

  • Electricians.
  • Roofers.
  • HVAC installers.
  • Drywall installers.
  • And more.

Be sure to check out which types of contractors must have a license to legally work in your state or city.

When Does Your Small Contracting Business Need Permits?

When Does Your Small Contracting Business Need Permits?

Just as it governs licenses, your state, city, or county governs permits. Depending on your industry and where you operate, you might need…

  • An employee permit to hire employees.
  • Building permits for certain projects.

Be sure to do your homework on which permits you need before you start work.

How to Find the Appropriate Contracting and Construction Licenses and Permits

How to Find the Appropriate Contracting and Construction Licenses and Permits

One of the best resources for researching necessary business licenses and permits is SBA.gov, the U.S. Small Business Administration's website. You can enter where your business is located and what industry it's a part of to find local requirements for your business.

In addition to obtaining the right licenses and permits, your construction and contracting businesses may have to carry License and Permit Bonds. This bond guarantees that you'll follow the rules and regulations governing your license. If you perform work that work isn't up to code or doesn't follow certain legal safety standards, a client can make a claim on your License or Permit Bond. In turn, your bond provider can cover the client's damages. Unlike other policies, you'll have to pay back any amount your provider pays toward the bond claim.

If you have any bond or insurance questions, send us an email or submit your question to our Contractors FAQ page. We're happy to help in any way we can.

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