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General Contractor

Minnesota general contractor license and insurance requirements

Kim Mercado image
By Kim Mercado
Jul 25, 2021 min read

In Minnesota (MN), licensing requirements for contractors vary. Most commercial general contractors don't need a license, but they do need to register with the state through the contract registration program.

However, if you work with homes, it’s a different story. If you're starting or growing your business as a residential building contractor or remodeler, and you plan to work in more than one skill area (e.g., excavation, carpentry, masonry/concrete, etc.), you need a license from the state. 

Once you have a state-issued license, you don’t need to get a local city or county license as long as the work you're doing is within the scope of your license. But if you're doing other types of work, are a specialty contractor or have a certificate of exemption, you might have to get a local license.

In this article, we'll cover:

  • How to get a general contractor license in MN
  • MN general contractor license requirements
  • MN general contractor license renewal
  • Exceptions to MN's licensing requirements
  • Minnesota residential contractor insurance requirements

How to get a contractor license in Minnesota

Getting an MN residential building contractor or remodeler license is pretty straightforward, but there are some things you need to do before submitting your application.

To get started, you have to register your business with the state and decide who will serve as the "qualifying person" (QP) for your business. The qualifying person must pass the Minnesota general contractor test before applying. They must also meet the continuing education requirements to keep the license active.

If you're a sole proprietor, you'll serve as the qualifying person. If not, you can designate someone else to be the QP.

Minnesota general contractor license requirements

Once you register your business and the qualifying person passes the exam, you can submit your application to the Department of Labor and Industry (DLI). To help prevent delays, here's a summary of the paperwork you'll need to provide with your application.

Business information

  • A copy of your certificate of incorporation or a screenshot of your business's information from the Secretary of State's website
  • You’ll need a copy of your assumed name certificate if you operate under a name that’s different from the business’ legal name (i.e., Jones and Son Plumbing vs. Jones LLC).
  • Relevant ownership information (aka owner, partner and officer disclosures)

Insurance information

Fees

  • Application fee
  • Contractor Recovery Fund fee. This fee replaces the bonding requirement and is based on your gross annual receipts for the most recent fiscal year. 

Additional requirements

  • Criminal background check form
  • Designated qualifying person form

Minnesota general contractor license renewal

Residential building contractor and remodeler licenses are good for two years and expire on March 31 of the second year. If you want to renew your license, your business's QP must complete 14 hours of DLI-approved continuing education every two years. At least one hour must be about the Energy Code, and one hour must be about business management strategies.

Renewal fees are based on gross receipts and may range from $445 to $645.

Exceptions to Minnesota's licensing requirements

While most residential building contractors need a license to work in Minnesota, there are a few exceptions. You don't need a license if:

  • You're an employee of a licensed contractor or a subcontractor who doesn't work directly with the homeowner.
  • Your work is limited to buildings with more than four units.
  • You're working on your own home, and you don't plan to sell it.
  • You're an architect or engineer, and you're not doing work outside the scope of your profession.
  • You're a residential building contractor with gross receipts of less than $15,000 a year and a certificate of exemption.
  • You only perform work in one skill area, and you're not a roofer. Roofers need a license.

Minnesota residential contractor insurance requirements

Having the right insurance coverage can help protect your business from financial losses if something goes wrong on one of your jobs. And there are a few types of insurance that Minnesota general contractors must maintain.

General liability

General liability insurance helps protect your business if you or one of your employees damages someone's property or injures a person who isn't an employee. It can also help pay legal fees and court costs if someone files a lawsuit against you for a third-party injury or property damage.

To work as a residential building contractor or remodeler in Minnesota, you need to have at least $300,000 of coverage per occurrence, which must include at least $10,000 of property damage coverage.

Workers' compensation

If you have employees, you'll probably need workers' compensation insurance, which helps pay the medical bills and lost wages of employees who get hurt or sick on the job. If you're exempt from the workers' compensation requirement, you must explain why.

Even if you don't have employees, you may want to consider purchasing coverage. Here’s why. Under Minnesota law, subcontractors are sometimes considered employees

But let’s say someone is not considered an employee. If you hire a subcontractor who doesn’t have workers’ compensation insurance and they or one of their employees gets hurt on the job, you could still be held liable for their injuries by law. 

Unemployment insurance

As a residential contractor in Minnesota, you might need unemployment insurance, which provides financial assistance to employees who lose their job through no fault of their own. If your business is exempt from carrying this type of insurance, you need to provide an explanation of why you're exempt.

How NEXT can protect your Minnesota general contractor business

NEXT specializes in creating customized insurance packages for general contractors like you. Whether you're a one-person shop or have a team of employees and subcontractors working for you, we have coverage designed to fit your business's unique needs.

The policies we offer include general liability, workers' compensation, professional liability, commercial auto and commercial property insurance. You can mix and match them to meet your needs, so you're never over or underinsured.

Our online application process makes it easy to get a free quote, see your policy options and choose the coverage you need in less than 10 minutes.

Our U.S.-based, licensed insurance advisors are ready to help if you have any questions during the application process.

Get your free instant quote today.

If your work's not limited to Minnesota, check out our general contractor license requirements for every state.

Kim Mercado image
By Kim Mercado
Kim Mercado is the managing editor of NEXT's small business blog.
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