Surety Bond Encyclopedia

Contractor License ($20,000) Bond - City of Des Plaines, IL in Illinois

Brief Summary

Check whether this bond applies to you before you buy it. Des Plaines requires contractors to register, but the $20,000 bond is narrower than that. The city requires it from a contractor doing work on City Property or in the right of way, and it says a bond is not required from State of Illinois licensed contractors doing work in the right of way. If your work stays on private property, you register without posting this bond. Registration itself expires December 31 no matter what month you file.

Des Plaines requires contractors working in the city to register with the city, and all registrations expire on December 31. Separately from registration, the city requires a $20,000 bond from any contractor doing work on City Property or in the right of way, and states that a bond is not required from State of Illinois licensed contractors doing work in the right of way. The City of Des Plaines is the obligee. City code section 8-1-5 governs work in the right of way and conditions a permit on the applicant establishing a security fund in an amount the director of public works and engineering determines.

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How to Apply for a Contractor License ($20,000) Bond:

Work out first whether the bond applies. The city requires it for work on City Property or in the right of way, not for every registered contractor.
If your right of way work is being done under a State of Illinois license, ask the city about the exemption before you buy anything.
Register as a contractor with the city through its Customer Self-Service portal.
Have the legal business name exactly as it will appear on the city registration.
Owner or principal information and authorization for a credit review.
Hold whatever state or county license your trade requires. The city lists a State of Illinois license for alarm and low voltage, fire sprinkler, irrigation and plumbing, an electrical test certificate for electricians, and a Chicago Drainlayers license for sewer only work.
Complete the bond application and review the quoted premium.
Pay the premium and receive the executed $20,000 bond naming the City of Des Plaines.
File it with your registration, and confirm the required amount for your specific permit if the job is large, since the code lets the director of public works and engineering set right of way security.
Diary December 31. Registration expires then regardless of when you filed.

Detailed Information About the Illinois Contractor License ($20,000) Bond:

Registering and posting the bond are two different things

This is where the page you are comparing against goes wrong, and it matters because it decides whether you spend anything at all.

Des Plaines requires contractors working in the city to register with the city. That applies broadly. The $20,000 bond does not. The city states it as a bond required for any contractor doing work on City Property and or the right of way. A contractor whose work stays on private property registers and does not post this bond.

So the first question is not what the bond costs. It is whether your scope touches city property or the right of way.

The exemption most pages leave out

The city also says, in the same place, that a bond is not required from State of Illinois licensed contractors doing work in the right of way.

That matters because several of the trades Des Plaines registers already hold a state license by definition. The city's own list shows a State of Illinois license required for alarm installer and low voltage work, fire sprinkler, irrigation and plumbing, and a Chicago Drainlayers license for sewer only work. Electricians are shown as needing an electrical test certificate.

If you hold a state license and your right of way work is what triggered the bond question, raise the exemption with the city before buying anything. Confirm it against your specific permit rather than assuming, because the exemption is written narrowly around right of way work.

December 31 is the date, whatever month you register

All registrations expire on December 31 and have to be renewed. The expiration is not twelve months from when you filed.

Register in October and you are renewing in a matter of weeks. That is worth knowing before you time a first application, and it is worth diarising for every year after.

What the code actually says, and where the figure comes from

Worth being straight about this, because it affects how you should treat the number.

The $20,000 appears on the city's contractor license and bond requirements page. It is the city's own published figure and it is the one to work from. The city code section covering this work, 8-1-5, is written differently. It says no permit shall be issued under that section until the applicant establishes a security fund, in an amount the director of public works and engineering determines to be reasonably estimated to cover restoration costs and potential city expenses. The code does not fix a dollar amount, and the exemptions it names are contractors performing work for the city department of public works and engineering and certain public utility companies rather than state licensed contractors.

Read together: $20,000 is the published standard, and the code gives the director room to set the security for a particular permit. If your job is unusual in scale, confirm the amount for your permit rather than assuming the standard figure covers it.

Other bonds in the code are not this bond

The permit fee section, 10-13-3, carries its own bond language. It requires a bond for all commercial, industrial and multifamily structures, and for residential one and two family dwellings and townhome principal structures. Demolition work carries a cash compliance bond of $5,000.00 or the value of site restoration.

Those are permit side requirements attached to particular work. They are not the contractor registration bond described here, and one does not satisfy the other. If your project involves demolition, budget the cash compliance bond separately.

Eligibility and Requirements for a Illinois Contractor License ($20,000) Bond:

A surety company authorized to do business in Illinois.
Bond amount of $20,000 as published by the city for work on City Property or in the right of way.
The City of Des Plaines as obligee.
Current contractor registration with the city, renewed each year by December 31.
The state or county trade license the city lists for your category, where one applies.
Business name on the bond matching the city registration exactly.
Owner credit review. At this bond size credit generally shapes the rate rather than deciding eligibility.

Illinois Contractor License ($20,000) Bond FAQs:

Does every contractor registering in Des Plaines need this bond?

No, and that is the most common error about it. The city requires contractors working in the city to register, but it describes the $20,000 bond as required for any contractor doing work on City Property and or the right of way. Work that stays on private property gets you a registration requirement without this bond.

I hold a State of Illinois license. Am I exempt?

Possibly, and it is worth asking. The city states that a bond is not required from State of Illinois licensed contractors doing work in the right of way. The exemption is written around right of way work specifically, so confirm it with the city against your actual permit rather than assuming it covers everything you do.

When does my registration expire?

December 31, no matter when you registered. All registrations expire on that date and have to be renewed. If you register late in the year you are renewing very soon after, so plan the timing.

Which trades have to register?

The city lists alarm installer and low voltage, electrician, fire sprinkler, general contractor, irrigation, plumbing, roofer, sewer only, and a catch all category for other contractors covering work such as concrete and asphalt, demolition, excavation, fence, HVAC, masonry and windows and doors. A homeowner acting as their own contractor is shown as not requiring a license.

Do I need a state license too?

For several categories, yes, and the bond does not substitute for it. The city's list shows a State of Illinois license required for alarm installer and low voltage, fire sprinkler, irrigation and plumbing. Electricians are shown as needing an electrical test certificate, and sewer only contractors a Chicago Drainlayers license.

What does the bond cost?

You pay an annual premium rather than the $20,000. At this size the premium is driven mainly by the owner's personal credit, and a municipal contractor bond of $20,000 is a small exposure that is written routinely. Rates vary enough by credit that quoting a range here would be misleading. Get your actual number, it takes a couple of minutes.

Is $20,000 always the amount?

It is the figure the city publishes, and it is the right starting point. Be aware that city code section 8-1-5 does not fix a dollar amount. It conditions a right of way permit on the applicant establishing a security fund in an amount the director of public works and engineering determines is reasonably estimated to cover restoration and city costs. For an ordinary registration the published $20,000 is what to expect. For an unusually large or disruptive job, confirm the amount for that permit.

I am doing a demolition. Is this the bond I need?

Not on its own. The city's permit fee section, 10-13-3, requires a cash compliance bond of $5,000.00 or the value of site restoration for demolition, and separately requires a bond for commercial, industrial and multifamily structures and for residential one and two family dwellings and townhome principal structures. Those are permit side requirements and they do not replace the contractor bond, or the reverse.

Who does the bond protect?

The City of Des Plaines is the obligee. Under section 8-1-5 the security exists so the city can recover restoration costs and expenses it incurs if the permit holder does not put the right of way back properly. It is not a warranty to your customer and it is not insurance for your own losses.