Licensed, Bonded and Insured in Minnesota: What It Means

Checked against the official sources below on November 12, 2026. By Twin Ports Contractors.

Short answer: In Minnesota these are four different things. A residential contractor license means an exam was passed and insurance is on file. A building contractor or remodeler license can also open the Contractor Recovery Fund to you. A registration, with an IR number, is not a license. Plumbing and heating contractors, among others, file a bond.

Contractors say “licensed, bonded and insured” as if it were one thing. In Minnesota it is four. Each one is a separate record, and each gives you a different amount of protection.

The four words at a glance

Word	What it is	Who has it
Licensed	A state license from the Department of Labor and Industry (DLI).	Home builders, remodelers, roofers, plumbing contractors, electrical contractors.
Registered	A contractor registration. The number starts with IR. Not a license.	Contractors with one specialty skill, and commercial contractors.
Bonded	A surety bond filed with the state.	Plumbing contractors, electrical contractors, residential roofers and mechanical (heating and cooling) contractors.
Insured	Liability insurance.	Required for a residential, plumbing or electrical contractor license. Registered contractors are not required to provide proof of it.

Licensed

Who needs a contractor license

DLI’s rules cover anyone who contracts directly with the owner of a home of one to four units:

Work in more than one special skill takes a residential building contractor or residential remodeler license.
Roofing only takes a building contractor, remodeler or roofer license.
A specialty contractor with only one special skill, other than roofing, does not need a state license.

The state lists other exceptions too. Among them: subcontractors who do not contract with the homeowner, owners working on their own property, and residential building contractors with gross annual receipts under $15,000 who hold a Certificate of Exemption.

The state counts eight special skills: excavation, masonry and concrete, carpentry, interior finishing, exterior finishing, drywall and plaster, roofing, and general installation specialties. So a company that only does masonry and concrete work does not need a state contractor license.

The three residential licenses

License	Number starts with	What it allows
Residential building contractor	BC	Everything a remodeler can do, plus new structures.
Residential remodeler	CR	Work on existing structures only. No new homes or detached garages.
Residential roofer	RR	Roofing only. Not gutters, downspouts, soffit or fascia.

What a license takes

A “qualifying person” at the company passes a state exam and keeps up continuing education.
The company shows proof of liability insurance, at the state minimums below.
The company shows it follows Minnesota’s workers’ compensation insurance rules.
The company pays into the Contractor Recovery Fund.

Plumbers and electricians

A business that contracts for plumbing work needs a plumbing contractor license or a restricted plumbing contractor license. A restricted plumbing contractor may only take work in communities with fewer than 5,000 people. Licensed plumbing contractors carry a surety bond and liability insurance, and the license number must be on all company vehicles.

DLI also licenses electrical contractors.

Solar

Since July 1, 2023, a company that contracts with a homeowner to install solar panels must hold a residential building contractor or remodeler license. The installation work must be done by a Minnesota-licensed electrical contractor.

Registered

Registration is meant for two groups that hold no residential license: contractors with a single specialty skill on residential jobs, and contractors on commercial projects. DLI says the program helps it enforce the laws on how construction workers are classified.

What a registration does not do:

It is not a license.
DLI says it “provides no level of consumer protection”.
DLI says registered contractors are not required to provide proof of insurance or bonding.
A registered contractor does not pay into the Contractor Recovery Fund.

A registration is not a way around a license. DLI tells contractors: if a license is required, do not register.

A one-skill contractor can work legally with a registration and no license. DLI still recommends hiring a licensed contractor. It says a registration is no reason to hire someone. If you hire an unlicensed contractor and suffer a loss, the Contractor Recovery Fund is not available. Ask to see proof of insurance yourself.

Bonded

A surety bond is written by a surety company licensed to do business in Minnesota and filed with the state. The two bonds a homeowner meets most often are:

Plumbing contractors provide a $25,000 surety bond to get a license. DLI can call on a plumber’s bond to correct work that does not meet code.
Mechanical contractors do gas, heating, ventilation, cooling, air conditioning, fuel burning and refrigeration work. Minnesota has no state license for them. Instead the business must file a $25,000 mechanical contractor bond with DLI. Mechanical contractors must also follow local licensing rules, and a city may require a license or a competency card for the workers.

That is why a heating and cooling company may have no state license number to show you. Ask whether its bond is on file with DLI, and ask what your city requires.

Electrical contractors also provide a $25,000 surety bond to get their license. See electrical work in Minnesota. DLI’s roofer license page lists a $15,000 surety bond for a residential roofer license.

There is also a pipe-laying bond, for contractors who install building water and sewer piping. Septic system installers are licensed by the Minnesota Pollution Control Agency instead.

What about a general contractor who says “bonded”? The state’s residential licensing page lists insurance among the license requirements. It does not list a bond. Ask which bond they mean.

Insured

State minimums for a license:

License	Minimum liability coverage
Residential building contractor, remodeler	$100,000 per occurrence, $300,000 aggregate, $25,000 property damage
Residential roofer	DLI’s roofer license page lists at least $300,000 per occurrence, including at least $10,000 property damage
Plumbing contractor	$50,000 per person, $100,000 per occurrence, $10,000 property damage

For anyone without a license, “insured” is only the contractor’s word until you see the certificate. Ask for it.

Building a new home? DLI’s consumer guide says to have a builder’s risk policy, or an amended homeowner’s policy, in place from the day construction starts.

The Contractor Recovery Fund

DLI calls access to this fund a very important benefit of hiring a licensed contractor. The fund compensates homeowners, residential lessees and homeowners associations for an actual, direct, out-of-pocket loss caused by a licensed residential building contractor or remodeler. The causes it covers are fraudulent, deceptive or dishonest practices, conversion of funds, and failure to perform.

You may be able to apply if all of these are true:

You are a Minnesota homeowner, residential lessee or homeowners association, and the loss was on owner-occupied residential property in Minnesota.
The contractor held an active building contractor or remodeler license when you signed and when the work was done.
You had an actual and direct out-of-pocket loss.
You obtained a final, docketed judgment against the contractor.
You apply within two years of the date that judgment was entered.

DLI’s consumer guide describes the steps. You first take the contractor to court and get a final judgment. Then you try to collect it. DLI’s application instructions say you must make reasonable efforts to collect before you apply, and that any amount you collect reduces what the fund may pay.

The statute, DLI’s application instructions and its fact sheet give the limits: up to $100,000 per applicant, and $550,000 in total for all claims against the same contractor. DLI’s consumer guide says $75,000 per claim, so the state’s own documents differ. The statute is the law. Ask the fund at 651-284-5057 if it matters to you. If claims against one contractor pass the total, payments may be prorated. The fund cannot pay more than the amount of your judgment. It does not pay attorney fees. It also does not pay for costs that are not part of the house itself, such as landscaping, fences, driveways, pools or accessory buildings. The statute counts a detached garage for vehicles as part of the home, so ask the fund about a garage.

The full steps, documents and deadlines are in how to get paid from the Contractor Recovery Fund.

The fund page names building contractor and remodeler licenses. DLI’s application instructions list work by contractors not licensed as a building contractor or remodeler among the things the fund does not cover. If your contractor holds only a roofer license, ask the fund before you count on it. The fund’s number is 651-284-5057.

What you see on our listings

“MN DLI license”, then the license type and “Issued”: a state license.
“contractor registration … (not a license)”: an IR registration.
“pipelaying bond … (not a license)”: a bond on file, not a license.
No license status: the business was found on Google in a trade where we hold no state license data, such as heating and cooling, or it is in Superior, WI, where we have not checked license records yet.

To confirm any of these yourself, see how to check a contractor’s license.

Questions to ask a contractor

What is your license number, and what type of license is it?
If you are registered and not licensed: which single skill do you do?
Can I see your certificate of liability insurance?
For heating and cooling: is your mechanical contractor bond on file with DLI? Does my city require a license?
For a big job: do you hold a building contractor or remodeler license, so the Recovery Fund may be open to me?

Common questions

Is a registered contractor licensed in Minnesota?

No. The Minnesota Department of Labor and Industry says a contractor registration is not a license. Registration numbers start with IR. It says registered contractors are not required to provide proof of insurance or bonding, and they do not pay into the Contractor Recovery Fund.

Does Minnesota license HVAC contractors?

No. The state says there is no state license for mechanical contractors. A business must file a $25,000 mechanical contractor bond with the Department of Labor and Industry to contract for heating, cooling, ventilation, gas or refrigeration work, and must follow local licensing rules.

How much insurance must a licensed Minnesota contractor carry?

For a residential building contractor or remodeler license the state's minimum is $100,000 per occurrence, $300,000 aggregate and $25,000 in property damage coverage, plus proof of workers' compensation compliance. The state's roofer license page lists different figures for a roofer license: at least $300,000 per occurrence, including at least $10,000 property damage.

Does every contractor need a license in Minnesota?

No. A specialty contractor who provides only one special skill does not need a state license, except roofers. A company that contracts directly with a homeowner for work in more than one special skill area does.

Sources

Every rule, number and deadline in this guide comes from these official pages, read on November 12, 2026. Rules change. The source is always the final word.

This guide is general information, not legal advice.