If you're running a roofing business in Illinois, understanding your insurance requirements isn't just about compliance—it's about protecting everything you've built. Illinois takes roofing contractor regulation seriously, and for good reason. Roofing is one of the most dangerous construction trades, with workers facing fall hazards, weather exposure, and significant liability risks. The state requires specific insurance coverage before you can legally operate, and the stakes are high if you don't get it right.
Here's what catches many new roofing contractors off guard: you can't even apply for your license without proof of insurance in hand. The Illinois Department of Financial and Professional Regulation won't process your application until you show them valid certificates of insurance. This means you need to understand exactly what coverage you need, how much it costs, and where to get it before you hang your shingle.
State Licensing and Insurance Requirements
Illinois offers two types of roofing contractor licenses, and the insurance requirements differ slightly between them. A Limited license covers residential roofing work on properties with 8 units or fewer. An Unlimited license allows you to work on residential, commercial, and industrial properties without restriction. Most contractors starting out go for the Limited license, then upgrade to Unlimited as their business grows.
For both license types, you must provide proof of property damage insurance of at least $250,000 and general liability insurance of at least $500,000. These aren't suggested minimums—they're absolute requirements written into Illinois law. Your insurance carrier will provide you with certificates of insurance that show these coverage amounts, and you'll submit those certificates with your license application.
In practice, most insurance companies and clients expect higher limits than the state minimums. The standard policy structure you'll see is $1 million per occurrence with $2 million aggregate for general liability. This is what about 99% of Illinois roofing contractors actually carry, because anything less makes it hard to bid on jobs. Commercial clients and many homeowners' insurance companies won't accept contractors with only the bare minimum coverage.
Workers' Compensation Insurance Requirements
Here's where Illinois gets strict: if you have even one employee, you must carry workers' compensation insurance. There's no employee threshold, no small business exception, no wiggle room. The moment you hire your first worker—whether full-time, part-time, or seasonal—you're required to have active workers' comp coverage.
The only exemption applies to sole proprietors and partnerships with absolutely no employees. If that's you, you can skip workers' comp and won't need to provide proof of it with your license application. But the minute you bring someone else on board, coverage becomes mandatory. This applies even if you're paying someone as a contractor—if the state determines they should be classified as an employee, you could face penalties for not having coverage.
Workers' compensation is expensive for roofing contractors because the work is classified as high-risk. Falls are the leading cause of death in construction, and roofers face this danger every single day. Insurance companies price accordingly. On average, roofing contractors pay about $458 per employee per month for workers' comp coverage. That's roughly $5,500 per employee annually. For a crew of five workers, you're looking at over $27,000 per year just for workers' comp.
One important note: Illinois law prohibits corporate officers and LLC members in extra-hazardous occupations—including roofing—from opting out of workers' comp coverage. In some industries, business owners can exclude themselves from coverage to save money. Not in roofing. If you're working on roofs alongside your crew, you're required to be covered, even if you own the company.
Surety Bond Requirements
In addition to insurance, Illinois requires roofing contractors to post a surety bond as part of their licensing. This is separate from your insurance policies, but it serves a similar protective function. A surety bond guarantees that if you fail to complete work or violate licensing laws, your clients have a way to recover damages.
For a Limited license, you need a $10,000 surety bond. For an Unlimited license, the requirement jumps to $25,000. The good news is you don't pay the full bond amount—you pay a premium, which is typically between 0.5% and 10% of the bond amount annually. For most contractors with decent credit and no claims history, a $10,000 bond costs between $50 and $1,000 per year, while a $25,000 bond runs $125 to $2,500 annually.
Your bond premium is based on your personal credit score, business experience, and financial strength. Contractors with excellent credit might pay just 0.5% to 1%, while those with credit challenges could pay the full 10%. Unlike insurance, which is based on risk of accidents and claims, bond premiums are based on the likelihood you'll default on contractual obligations.
What Insurance Actually Costs
Let's talk real numbers. General liability insurance for roofing contractors in Illinois typically runs between $150 and $300 per month, depending on your annual revenue, number of employees, claims history, and the types of projects you take on. A solo residential roofer might pay closer to $150 monthly, while a larger operation doing commercial work could hit $300 or more.
Overall, roofing business insurance packages—which typically bundle general liability, workers' comp, commercial auto, and equipment coverage—average about $473 per month. That's nearly $5,700 per year. Some contractors pay less if they're small and have great safety records. Others pay significantly more if they have multiple crews, high revenue, or past claims.
Commercial auto insurance adds another layer of cost if you're driving company vehicles to job sites. Construction contractors pay an average of $173 per month for commercial auto coverage. Tools and equipment insurance is relatively affordable at about $14 per month, covering theft or damage to your ladders, nail guns, air compressors, and other gear.
The biggest variable in your insurance costs is your safety record and claims history. Contractors who invest in safety training, use proper fall protection equipment, and maintain clean records can qualify for significant discounts. One claim can spike your premiums for years. This makes safety programs not just ethically important, but financially critical.
Recent Changes and What's Coming
The Illinois Roofing Industry Licensing Act was originally scheduled to sunset and expire on January 1, 2026. That would have thrown the entire industry into uncertainty about what licensing requirements would look like going forward. Fortunately, the Illinois General Assembly passed Senate Bill 2503, extending the Act through January 1, 2031. This gives roofing contractors five additional years of regulatory stability.
The extension came with some new requirements. Contractors must now provide a valid email address to the Department and notify them within 14 days if it changes. You're also required to retain all contract records for at least seven years. These aren't burdensome changes, but they're important to stay compliant with.
Additionally, if you're bidding on public work—projects for the state, municipalities, counties, or school districts—you must go through a formal procurement process and maintain all proper licenses and credentials. The state is tightening oversight on public projects to ensure only properly licensed and insured contractors are doing the work.
How to Get Started
Getting your insurance and licensing in order isn't as complicated as it might seem, but you need to tackle it in the right order. Start by contacting insurance agents who specialize in contractor coverage. They understand the specific requirements for Illinois roofing licenses and can package the exact coverage you need. Don't go with a general business insurance agent who doesn't understand construction—you'll end up with gaps in coverage or paying for things you don't need.
Once you have your insurance quotes, secure your surety bond from a bond company or through your insurance agent. With your certificates of insurance and bond in hand, you can apply for your roofing license through the Illinois Department of Financial and Professional Regulation. Your qualifying party will need to pass the relevant licensing exam, and you'll pay the application and exam fees.
Remember that your roofing license expires on December 31 of odd-numbered years, so you'll need to renew every two years. The renewal fee is $62.50, and you'll need to maintain your insurance and bond continuously. Let either lapse, and your license becomes invalid. Operating without a valid license in Illinois can result in fines and legal trouble, so set calendar reminders well in advance of expiration dates.
The insurance requirements for Illinois roofing contractors might seem like a financial burden when you're starting out, but they're actually protecting you from catastrophic losses. One serious injury to a worker or one lawsuit from a property damage claim could bankrupt an uninsured contractor. The required coverage ensures you can weather those storms and stay in business for the long haul. Get properly insured, maintain your license, and focus on building a reputation for quality work and safety.
