Want to be a contractor or a handyman in Iowa? Here’s what you need to know about licenses, registration, and insurance.
So you’ve decided to finally go into business for yourself and set up shop as a construction contractor or handyman. Now what? Unfortunately, it isn’t as easy as picking a name and printing some business cards. There’s a process you’ll need to go through to get an Iowa contractor license before you can legally start selling your services.
While this is an essential step in your business journey, it doesn’t have to be a scary one. In this post, we’ve got the lowdown on how to make your contractor business official, and most importantly, legal.
If you drive a car, you likely associate the phrase “let me see your license, registration, and insurance" with being pulled over. While we’re used to the idea of licenses and registration for cars, it may not be the first idea to come to mind when you decide to be a contractor. The reasons behind licenses and registration for business are much the same as for a car.
First, let’s explore the “what" of the situation.
Licensure laws require contractors to meet specific requirements around experience, education, or examination before they can be officially open for business. General contractors are in luck here because Iowa doesn’t have a “license law" for general contractors, so no exam is needed to start your business. However, licenses are required for certain specialties, such as plumbing or HVAC.
Registration laws are created to ensure that both contractors and customers have protection under the law. Construction contractors in Iowa are required to register, which is simply a formal way of letting the state know you’re working as a contractor, and ensuring that you have insurance.
Plus, if you don’t register your contracting business in Iowa, you may receive a $500 citation or $5,000 fee for repeat violations.
Business insurance protects your business in the chance that something goes awry. Iowa requires contractors to have insurance and for good reason. Having business insurance along with your Iowa contractor license can help:
Licenses, registration, and insurance are useful for both cars and businesses in case of an accident. General liability insurance protects your business (and your wallet) in the case of property damage or injuries during a job. These state-required steps also protect customers and the contractor industry as a whole by monitoring who is allowed to conduct business.
If you currently have employees or plan to hire them in the future, you also have the option of looking into workers compensation insurance. This insurance will help to protect your employees in case them get sick or injured while on the job.
You may need to show proof of business insurance to get your license.
That’s where we come in. Compare free insurance quotes for policies as low as $22.50/month.*Start Here >
If getting your Iowa contractor registration is a must-do, then how do you do it? Here are the steps you need to get set up as a general contractor in Iowa.
Dear plumbers, electricians, HVAC specialists, and more, this section is for you! Before you can start working, you need to be licensed and registered in Iowa. Luckily, the state has combined some steps and offers a single 3-year application and renewal process for both license and registration.
If you think you may fall into this category, you can explore specialties and levels here. Before taking your exam, you’ll need to submit an application and meet specific experience requirements. After your exam application is approved, you’ll schedule your exam. Fees for licensure and registration also vary by experience level and when you register.
In addition to passing an exam, you’re required to have public liability insurance, a surety bond, documentation of related criminal records, unemployment insurance, and worker’s compensation insurance. Specialty contractors have a few extra steps to get their business off the ground, but licensing is worth it to make sure quality and safety standards are met.
There is a list of items that you should have ready before you submit your Iowa contractor registration.
Your SSN or EIN. You can apply for registration as a sole proprietor, partnership, corporation, or LLC.
An unemployment insurance number. Anyone seeking an Iowa Department of Labor contractor registration must register for an unemployment insurance account, even if you don’t have any employees yet. You can get your UI number here.
A NAICS code. North American Industry Classification System (NAICS) helps classify different types of businesses. On your registration application, you’ll choose the code that matches the kind of work you’ll do. Examples include 238320 (Painting and Wall Covering Contractors) or 236118 (Residential Remodelers).
Worker’s compensation insurance. If you have one or more employees, you need to submit proof of worker’s compensation insurance.
Out-of-state bond. If you live out-of-state but will be contracting within Iowa, you’ll need a $25,000 surety bond.
All general contractors who will make at least $2,000 a year must register their business. Still, some may not have to pay the application fee. If you are:
Then you sign and notarize the fee exemption form and bypass the usual $50 registration or renewal fee.
Whew! You have your unemployment number, applicable insurance, identification numbers, and payment ready. Next, you’ll fill out the registration application that’s available for download. Send your application, supporting documents, and $50.00 check or money order payable to “Iowa Division of Labor" or signed and notarized Fee Exemption form to:
Iowa Division of Labor, Contractor Registration 1000 East Grand Avenue Des Moines, IA 50319-0209
You also have the option to complete registration or renewal in-person at 150 Des Moines St, Des Moines, IA50309. If your application is complete, processing may take up to 30 days.
Each year you’re required to renew your contractor registration following the same process and fees. The state will send you a renewal form by mail or email a month before expiration, and renewal payments can be made online.
Have more questions about getting your Iowa contractor license? Find answers at the official Iowa Workforce Development website.
If you still need to get general liability and worker’s comp insurance before you can apply, get a contractor's insurance quote to ensure you’re covered. We also have a guide on How to Start a Handyman Business.
Don't forget, you may also be required to get an Iowa business license! Check out our simple guide here.
* Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on January - December 2020 data of 10% of our total policies sold.
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.