In Louisiana, both commercial contractors and home improvement contractors are licensed by the Louisiana State Licensing Board for Contractors. The specific type of license required depends on the work to be performed and the size of the projects to be undertaken. General contractors working on projects of a certain size may hire only properly licensed subcontractors. Learn how to get a contractor�s license in Louisiana.
Who Needs a Louisiana Contractor�s License?
A commerciallicense is required for residential construction with no more than four incorporated or attached residential units if the combined cost of labor and materials exceeds $75,000. With a couple of notable exceptions, subcontractors and specialty contractors must hold a commercial license to work on such projects where the cost of labor and materials exceeds $7,500. Those exceptions are:
- Electrical, mechanical and plumbing contractors, who must have a commercial license to work on projects valued at $10,000 or more for materials and labor, and
- Contractors doing remediation or removal of asbestos, hazardous waste, lead paint, or underground storage tanks, who must have a commercial license for any project valued at $1 or more.
You�ll need to register as a home improvement contractor if you take on home improvement projects valued between $7,500 and $75,000 (not including swimming pools).
The Licensing Process
The registration process for home improvement contractors is relatively simple. It involves completing the Home Improvement Registration application and submitting it to the Board along with certain supporting documents. Home improvement contractors must carry general liability and worker�s compensation coverage, and are required to obtain a contractor�s license bond, regardless of where they work within the state of Louisiana.
Becoming licensed as a commercial contractor does not necessarily involve the purchase of a contractor license surety bond. Only three jurisdictions requires a surety bond as of this writing: Ascension Parish ($5,000 bond), the City of Lake Charles ($7,500 bond), and Gonzales ($5,000 bond).
Why Is a Surety Bond Required?
A surety bond protects the state, project owners, and consumers against financial loss due to the insolvency or the unethical or illegal actions of the bonded contractor. It guarantees that the contractor will conduct business in accordance with all applicable laws and standards, as set forth in the terms of the surety bond agreement. Any violation of the agreement entitles the injured party to file a claim against the bond for compensation.
How Does a Contractor�s Surety Bond Work?
The surety company will investigate any claim filed against a contractor�s bond to ensure that the claim is valid. Ideally, the contractor would immediately pay the claim, but in most cases, the contractor may need some time to gather the funds. Consequently, the surety company will pay the claim and then seek reimbursement from the contractor. It is ultimately the contractor�s legal responsibility to pay all valid claims.
What Does It Cost?
To obtain a surety bond, the contractor pays only a small percentage of the required bond amount. The surety company establishes that percentage, the premium rate, on a case-by-case basis. The primary consideration for the surety company is the contractor�s personal credit rating, which is a good indicator of the contractor�s ability to reimburse the surety company for any claims paid on the contractor�s behalf.
What Are the Costs of Obtaining a Contractor's License in Louisiana?
Apply online or give us a call today to get the surety bond you need in order to obtain a commercial contractor�s license or home improvement registration in Louisiana.