Contractor (License & Permit) Bonds

What is a Contractor License Bond? (What does the bond cover?)

While starting the process of getting your contractor license, you may discover your state’s licensing board lists securing a Surety Bond as a licensing requirement. The licensing board enforces this requirement to ensure you perform your duties, as a licensed contractor, ethically and abide to all of the rules and regulations set by the state or city.

We realize contractors have many steps to complete when getting their license. Our goal is to be one of the easiest steps.

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Alabama City Of Auburn Get Quotes
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California Contractor Bond ($15,000) Get Quotes
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Colorado City Of Denver Get Quotes
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Delaware City of Wilmington Licensed Plumber Get Quotes
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Florida Contractor’s Sales or Use Tax Get Quotes
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Louisiana City of Lake Charles Get Quotes
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Maryland Home Improvement Contractor Bond $20,000 Get Quotes
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Minnesota City of Brainerd Get Quotes
Minnesota City of Minneapolis - Residential Get Quotes
Mississippi City of Jackson Get Quotes
Mississippi City of Meridian Get Quotes
Mississippi Contractor's Blanket Sales, Use, Income, Franchise, Withholding and Special Fuel Tax Bond Get Quotes
Mississippi Department of Revenue - Contractor's Bond - Single Job Get Quotes
Missouri County of Jefferson Get Quotes
Montana Special Fuel User Contractor's Bond Get Quotes
Nevada State Contractors Board Bond - Northern Nevada Get Quotes
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New Jersey Borough of Franklin Lakes - Septic Contractor's Bond Get Quotes
New Mexico Contractor Get Quotes
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New York Putnam County Get Quotes
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North Dakota City of Grand Forks - Moving Contractor's License Bond Get Quotes
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Ohio City of Aurora Get Quotes
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Ohio Village of Hartville - Contractor Registration Bond Get Quotes
Ohio City of Mentor-On-The-Lake - Contractor Bond Get Quotes
Ohio City of Sandusky - Contractor Bond Get Quotes
Oklahoma Construction Industries License Get Quotes
Oregon Flagging Contractor Get Quotes
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Oregon Landscape Contractor Bond ($10,000) Get Quotes
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Oregon Statutory Public Works Bond Get Quotes
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Washington Continuous Plumbing Contractor Get Quotes
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Wisconsin City of Madison Get Quotes
Wisconsin City of Superior Get Quotes

When competing for a job, the contractor with a license, insurance and a bond offers more peace-of-mind for the client. Because, the Contractor Bond protects your clients from financial loss if your craft is inferior or you fail to meet the terms of the agreed upon contract. By enforcing the Surety Bond requirement, the licensing board removes risk of being financially responsibility for claims against your license.

Surety Bond vs Insurance

The Surety Bond does not function the same way as your insurance policy. Unlike liability insurance, the bond doesn’t provide coverage for you as the contractor. The bond serves as a contract between three parties.

The Principal – As the licensed contractor, you are named the principal on your bond document.

The Obligee – This is the entity enforcing the bond requirement. Typically, the obligee is the state, city or county licensing board.

The Surety – The company that issues your Surety Bond.

Your Surety Bond is coverage for your clients should they need to make a claim against your job performance or failure to complete your work. If a claim is deemed valid by the surety company, your client will be reimbursed up to the full amount of your bond.

Who is responsible for paying a claim?

Neither you nor the surety company expect to receive a claim. Which is why the cost of a Contractor Bond is only a small fraction of the bond amount. However, claims do happen.

If your client makes a claim against your bond, the surety company that issued your bond will conduct a thorough investigation on the claim. If the surety finds the claim to be valid, they will payout up to the total bond amount to the claimant. The responsibility of repaying the surety back in full is yours to bear as the principal of the bond.

Types of Contractor License Bonds

The type of Contractor License Bond you require largely depends on the location you operate your business and the type of work you perform. These bond types can be residential or commercial.

The most common types of Contractor Bond requests we receive:

General Contractor License Bond

Municipality (County / Town / Village) Contractor License Bond

State Contractor License Bond

Specialty (Electrical / HVAC / Landscaping / Plumbing) Contractor License Bond

Please be aware not every state or municipality require licensees to get a bond. We recommend contacting your area’s licensing department to determine their licensing requirements. If a Surety Bond is necessary to receive your license, please request they provide a copy of the bond form. This will ensure you get quotes for the correct bond type.

If you’re a contractor needing a Surety Bond for a different reason not related to your license, such as a bid for a job or protection if an employee steals from a client, we can help! Contract Bonds or Construction Bonds include Payment Bonds, Bid Bonds and Performance Bonds. While Fidelity Bonds include Business Service Bonds (Janitorial Bonds) and Employee Dishonesty Bonds (Commercial Crime Policies). Get additional information and quotes for these types of policies using the buttons below.

How much does a Contractor Bond cost?

The surety considers the risk they are taking on when calculating the premium for your bond. When reviewing your application, your credit score and the bond amount you require are two of the biggest factors for determining your bond premium.

If your bond does require a credit check, we’ll perform a soft-pull on your credit. A soft-pull does not adversely affect your credit score. Most of our clients pay $100 – $200 for their Contractor License Surety Bond. Which is typically 1% or less of the total bond amount.

What if I have bad credit?

You may still be approved for your Contractor Bond even if your credit isn’t good. Our partnerships with the leading surety companies allows us to quote applicants with non-standard credit.

Applicants with non-standard credit usually receive quotes in the range of 5%-15% of the total bond amount, if approved. Since there is greater risk associated with the bond, the premium is slightly higher.

Don’t let your credit score prevent you from requesting a quote.

Where to get a Contractor Bond near me?

Don’t settle for just one quote for your Contractor License Bond. At Surety Solutions, A Gallagher Company, you have access to an online marketplace of leading surety companies. Compare prices from multiple companies to ensure you get the best deal for your bond.

We are licensed to issue bonds in all 50 states. If you have any questions, our staff of surety professionals are happy to help! Contact us by emailing info@suretysolutions.com or reach us by phone at (866) 722-9239. Don’t wait! Get your Contractor Surety Bond quotes, today!

Additional Resources

Everything you need to know about becoming a licensed contractor.

Check out the answers to our frequently asked questions.

Find the specific steps needed to get a contractor license in your state.

We can assist with other bond types!

Start by clicking your state on the map below.

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