How to Start a Plumbing Business in Illinois: Licenses, Costs & Insurance

Illinois licenses plumbers statewide through the Illinois Department of Public Health (IDPH), and any plumbing business that works for customers must also register each year as a plumbing contractor, with insurance and a $20,000 bond. Chicago has its own licenses on top of that.

This guide is for plumbers moving into ownership and for owners setting up a plumbing company in Illinois. Forming a business, or holding a worker’s license, doesn’t by itself give the company the right to contract for plumbing work.

Reviewed October 1, 2026. Some links are affiliate links; we may earn a commission. Paid providers are optional and don’t issue plumbing licenses.

Get the IDPH plumber license and plumbing contractor registration

Under the Illinois Plumbing License Law, IDPH licenses plumbers, apprentice plumbers and plumbing contractors. The usual route:

• Apprentice plumber: at least 16 years old, sponsored by an Illinois licensed plumber or an approved apprenticeship program. The apprenticeship can last up to six years.
• Licensed plumber: at least four years as a licensed apprentice, at least two years of high school or the equivalent, and approved coursework, then the state exam. Apply at least 30 days before the exam date. Licenses renew by April 30 and require continuing education every year.
• Plumbing contractor registration: any licensed plumber or apprentice who performs work for another person must register as a contractor and renew every year by the end of September (225 ILCS 320/13.1). All employees doing plumbing must be licensed plumbers or apprentices.

Chicago: the City issues its own plumbing licenses. A new Chicago plumbing contractor license must be applied for by a City of Chicago licensed plumber who owns or is an officer of the business. It costs $150 a year in 2026 and requires a $20,000 performance bond filed with the City Clerk.

Fees: IDPH charges exam, license and annual contractor registration fees set by rule. We didn’t find a current IDPH fee page we could verify, so check the fee on each IDPH form before you apply. Chicago’s 2026 plumbing contractor license fee is $150 to start and $150 to renew.

Write down the services your license will cover and who is responsible for supervising the work. Ask separately about specialty work such as medical gas, backflow testing, gas piping, septic systems or well work. Don’t assume every job involving pipe falls under the same license. Plan what happens if the person whose license the company relies on leaves.

Set up the business in the same name you will license

Choose the ownership structure before you finish license applications, insurance and banking. An LLC is an option, not a substitute for plumbing licensing. Our Illinois LLC guide explains filing choices and costs so you can compare filing yourself with optional help.

Use the same legal name, and any registered trade name, on license records, estimates, insurance certificates and payment accounts. Decide who can sign contracts, approve supplier purchases and use the bank account. If there are several owners, put licensing and money responsibilities in your ownership agreement.

Use the Illinois business requirements checklist for general setup, such as state tax accounts and registrations. Ask your city or county about local business licenses, zoning and storage rules for your office or shop, even if it’s in your home.

Open a separate business bank account and keep job-by-job records before you take deposits. Get an EIN when you need one through the IRS’s free EIN application. Track materials, labor, permit fees and customer payments separately, so unpaid invoices don’t look like cash in the bank.

Arrange plumbing liability coverage and workers’ compensation

For coverage choices, licensing limits and quote preparation, see our Illinois plumbing insurance guide.

To register as an Illinois plumbing contractor, you file a certificate of insurance showing at least $100,000 per occurrence general liability, $300,000 aggregate bodily injury and $50,000 property damage (or a $300,000 combined single limit), plus workers’ compensation with at least $500,000 employer’s liability. You also file a $20,000 indemnification bond or letter of credit. The insurance must stay in force for the registration to stay valid (225 ILCS 320/13.1).

Illinois employers generally must carry workers’ compensation (Illinois Workers’ Compensation Commission). If you’re a sole owner with no employees, ask IDPH how to show the workers’ comp part on your registration.

Tell the insurer about drain cleaning, digging, gas piping, commercial work, subcontractors and the tools you keep in your van. Ask about completed work, water-damage claims, exclusions, commercial auto and equipment theft. Make sure coverage is active before you book the work; a quote request isn’t a policy.

Check permits and site access before promising a completion date

Permits and inspections are handled by the city, village or county where the work is; some smaller communities rely on IDPH inspectors. Chicago has its own permit system. Ask each place you work.

• Water heaters and fixture swaps: check whether the actual job needs a permit and inspection instead of assuming replacements are exempt.
• Repiping and remodels: plan inspections before walls are closed, and agree who repairs drywall and finishes.
• Sewer and underground work: call for utility locates before digging, and find out whether street or utility approvals are involved.
• Apartments, condos and managed buildings: agree on access, water shutoff notices, work hours and any paperwork the property manager needs.

Write down existing damage and access limits before you start. Don’t promise a permit waiver or an insurance payout you haven’t confirmed.

Budget for a Illinois service operation, not just the license

Build the budget around the services you’ll open with: repairs and replacements, drain work, remodels or commercial subcontracting. Price the actual equipment and insurance before committing to a van or taking on debt. You can often rent specialty cameras and drain machines at first if the jobs justify it.

Example launch cash plan—not surveyed Illinois prices

Category	Example allowance
Setup and first insurance payments	$3,000 placeholder for applications, exams, company setup and first insurance payments; replace it with your actual fees and quotes.
Tools and opening parts	$5,000 to fill gaps in an existing toolkit and stock common repair parts.
Vehicle preparation	$2,000 for a suitable vehicle you already own; doesn’t include buying a van.
Working cash	$8,000 assumed reserve for supplier bills, fuel and overhead until customer payments arrive steadily.
Example total	$18,000, not counting a vehicle purchase, employee payroll, major specialty equipment or household living costs.

Plan weekly cash needs, including a late invoice or a callback you can’t bill. New businesses may not meet a lender’s time-in-business or revenue rules. Compare total repayment, fees, payment schedule and personal guarantees before you borrow; approval isn’t guaranteed.

Price the job, document the scope and collect payment

Set a clear service-call or diagnostic fee. A short repair can still involve driving, picking up parts, paperwork and a return trip, so the wage you want isn’t the same as your billing rate. The national plumbing pricing example shows how the same monthly cost target leads to different rates at different numbers of billable hours.

Before work starts, write down the approved repair, included materials, who pulls the permit, what restoration isn’t included and how payment works. Get approval for extra work you find after opening a wall or scoping a drain. Have Illinois contract and notice rules reviewed before you adopt standard paperwork.

Sort out sales tax before you copy an invoice template. States treat contractors differently: in some, you pay tax on materials you buy; in others, you charge tax on some jobs. Ask the Illinois tax agency or your bookkeeper how it applies to your repair, installation and new-construction work. Our Illinois business setup guide covers state tax registration.

Check your payment system’s fees, payout timing and dispute process. Keep the customer’s approval, before-and-after photos and completion notes with the invoice. For commercial jobs, plan for progress billing and retainage separately from pay-when-done home service calls.

Win local work before adding a second truck

Pick a service area you can cover profitably, and make your services and hours clear. Build referral relationships with property managers, remodelers and other trades. Ask happy customers for honest reviews, and track which inquiries turn into paid jobs, not just which ads make the phone ring.

For managed properties, prepare a short packet with your current license, insurance certificate, contacts and invoicing details. Agree who can approve an emergency repair and what happens if the repair costs more than first approved.

Hire for a specific bottleneck. Check the worker’s license or registration, required supervision, payroll setup and workers’ comp before the first shift. Count training, travel, unbilled hours and extra equipment in the cost of growing.

Our skilled-trade and AI construction research is useful background, but announced projects don’t prove demand for your particular service. Build your first operation around customers you can reach and work you’re licensed and equipped to do.

Illinois plumbing startup questions

Do I need both a plumber license and a contractor registration?

Yes, if you work for customers. The license covers you as a plumber, and the annual contractor registration covers the business, with its insurance and bond.

Does an Illinois license work in Chicago?

Chicago issues its own plumber and plumbing contractor licenses. A new Chicago contractor license must be applied for by a Chicago-licensed plumber, so check the City’s rules.

Can I hire unlicensed helpers?

Under state law, employees of a registered plumbing contractor who do plumbing work must be licensed plumbers or apprentices.

Continue with the national plumbing business guide, the Illinois business setup hub or the Illinois LLC filing guide.