Chicago Contractors Get a Break on Insurance

Contractors working in Chicago will no longer have to carry as much liability insurance coverage, thanks to a modification of a 2004 licensing law.

Under the prior rules, contractors needed $5 million of liability insurance for all projects valued at more than $2 million. Under the revised ordinance, contractors with projects valued at up to $10 million need $3 million of liability insurance. Contractors with projects of up to $5 million need $2 million of coverage, and those with projects of less than $500,000 required to have $1 million in coverage.

"Some of the overly harsh requirements had the unintended consequence of raising the cost of housing in Chicago," says Jerome Wade, cofounder of the Southside Builders Association, a trade group of small developers on the city's South Side.

Wade estimates that required insurance added from $20,000 to more than $100,000 to the annual cost of doing business. The new insurance guidelines took affect Sept. 14.

- From Realtor® Magazine

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