How to Get a Contractor’s License in Indiana

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Surety Bond Professionals is a family-owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your Indiana contractor license bond needs. Learn how to get a contractor’s license in Indiana, below.

What Contractor Licenses Are Issued in Indiana?

The only contractors licensed at the state level in Indiana are plumbing contractors. All other contractors, both general and specialty, are licensed by the municipalities in which they operate.

What Are the Steps in the Licensing Process?

The local licensing process varies by jurisdiction, but they all involve providing proof of general liability insurance. If the contractor has employees, they also must provide proof of workers’ compensation insurance. They also typically involve providing letters of reference and agreeing to a criminal background check.

Some municipalities require applicants for a general contractor or specialty contractor license to pass a written exam while others don’t. Some require a contractor license bond and others don’t. When a contractor license bond is required, it’s typically in the amount of $5,000, $10,000, or $20,000.

Why Is a Contractor License Bond Required?

An Indiana contractor license bond provides financial protection for the licensing authority and the public, not for the contractor. The bond serves as the contractor’s guarantee to comply with relevant portions of the Indiana Administrative Code and any applicable local ordinances. Any failure to do so that results in a financial loss gives the injured party the right to file a claim against the bond and be compensated for damages.

When a contractor license bond is required, it must remain in force at all times to prevent license suspension or revocation.

How Are Contractor License Bond Claims Paid?

The surety bond agreement is a legally binding contract that, regardless of jurisdiction, obligates the contractor (the bond’s “principal”) to pay all valid claims. The licensing authority (the bond’s “obligee”) and the surety company (the “surety”) are indemnified against any responsibility for paying claims.

In practice, however, unless the principal pays a claim promptly, the surety typically will go ahead and pay it. The principal must then, by law, reimburse the surety per the indemnity agreement.

How Much Does an Indiana Contractor License Bond Cost?

The surety takes on a certain degree of risk in paying a claim on behalf of a principal and is banking on the principal’s willingness and ability to repay the resulting debt. Consequently, the main underwriting considerations are the principal’s personal credit score and financial strength.

A contractor with good credit (700 or above) most likely will pay a premium rate that’s in the range of 1% to 2% of the required bond amount. Lesser credit will result in a higher premium rate and can make it more difficult for a contractor to get bonded.

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Our surety bond professionals will get you the Indiana contractor license bond you need at a competitive rate.