What Licenses and Permits Do I Need to Start an Excavation Company?

Starting an excavation company involves more than just buying equipment and finding clients—it also requires navigating a range of licenses and permits to operate legally and safely. Whether you're digging basements, clearing land, or installing utilities, understanding your legal obligations is essential to avoid costly delays or fines.

In this guide, we’ll break down the most common licenses and permits required to start an excavating business in the U.S., and how Excavating Insurance Partners can help you protect your business from day one.

1. Business Entity Registration

Before applying for any licenses, you’ll need to register your business with your state.

• Choose a legal structure (LLC, S-Corp, etc.)

• Register your business name

• Apply for an Employer Identification Number (EIN) through the IRS

👉 Need help planning your business? Download our e-book: How to Start an Excavating Business

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2. State Contractor’s License

Many states require a general contractor’s license or a specialty license for excavation work. Requirements vary by state and may include:

• Proof of experience

• Passing a trade exam

• Holding a surety bond

• Submitting financial statements

Examples:

• California: Requires a C-12 Earthwork and Paving Contractor license

• Tennessee: Requires a contractor’s license for excavation over $25,000

• Michigan: Excavation contractors must register with the Department of Licensing and Regulatory Affairs

Check your state’s licensing board or visit the SBA’s state license directory for details.

3. Local Business Licenses and Permits

Even if your state doesn’t require a license, your city or county might. Common local requirements include:

• Business license or tax registration

• Excavation permit for each job site

• Right-of-way or street opening permits

• Proof of insurance and bonding

Example:

• Florissant, MO: Requires an excavation permit and proof of liability insurance

  
  

4. Commercial Driver’s License (CDL)

If you or your employees will be hauling heavy equipment using large trucks, you’ll likely need a CDL issued by your state’s DMV.

5. Utility Notification System Registration

Before digging, you must notify your state’s 811 call center to locate underground utilities. Some states require contractors to register with the system.

Visit call811.com to learn more.

6. Environmental and Safety Compliance

Depending on your location and services, you may need:

• Stormwater discharge permits (SWPPP)

• Dust control permits

• OSHA safety training for trenching and excavation

👉 Learn more at OSHA’s Excavation and Trenching Safety page

7. Insurance and Bonding

Most licensing authorities require proof of insurance and bonding. At Excavating Insurance Partners, we help you secure:

• General liability insurance

• Contractor’s equipment coverage

• Workers’ compensation

• Surety bonds (if required by your state or municipality)

👉 Get a free quote today

Final Thoughts

Getting the right licenses and permits is a critical step in launching your excavation business. It ensures you’re compliant, credible, and ready to take on jobs with confidence. Pair that with the right insurance coverage, and you’ll be well on your way to building a successful and protected business.

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Need help getting started? Download the e-book or contact us for expert insurance guidance tailored to excavation contractors.

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