What are Contractor’s License Bonds?
These are surety bonds that are required to obtain a license or permit. Under the definition of a surety bond, they have the three parties.
- Principal: The contractor or construction company who took the Contractor’s License Bond.
- Obligee: The individual or organization that requires the construction professional to be properly bonded.
- Surety: The company that issued the bond to the principal. They are the ones who guarantee the obligations taken on by the principal.
Who is protected?
It is important for contractors in every industry to secure bonds and insurance for their business. Oftentimes, these terms get confused for one another, and it is important to know the difference and why you would need to acquire both. Bonds are there for the clients of the contractors to assure them that work will be completed as stated in the agreement between customer and contractor. Insurance is there to protect the contractor’s business in the event of a catastrophic event. It is important to have both, as many states require contractors to carry a surety bond for their business and proper insurance.
Contractor’s License Bonds are designed to protect the contractor or construction company’s customers. It promises that the construction professional will adhere to all laws and regulations outlined in their specific job classification. See below for a list of classifications.
Applying for a Contractor’s License Bond.
Contractor’s License Bonds vary in price depending on the bond amount. Different contractors are required to obtain different bond amounts. The price of the bond costs anywhere between 1% and 5% of the total bond amount. Applicants with better credit scores are offered better rates on their bonds. The good news is that if the applicant has less than stellar credit, they can re-apply every year to refinance. This way, if their credit rating improves, they can get a better price on their bond.
This also means that to apply for a Contractor’s License Bond, the applicant must show company information as well as company financial statements. To apply for a bond, you can CLICK HERE!
Types of Construction Licenses
- (A) General Engineering Contractor
- (B) General Building Contractor
- (B-2) Residential Remodeling Contractor
- (C) Specialty Contractor
- (C-2) Insulation and acoustical Contractor
- (C-4) Boiler, Hot Water Heating and steam fitting Contractor
- (C-5) Framing and Rough Carpentry Contractor
- (C-6) Cabinet, Millwork, and Finish Carpentry Contractor
- (C-7) Low Voltage Systems Contractor
- (C-8) Concrete Contractor
- (C-9) DRYWALL CONTACTOR
- (C-10) ELECTRICAL CONTRACTOR
- (C-11) ELEVATOR CONTRACTOR
- (C-12) Earthwork and Paving Contractors
- (C-13) Fencing Contractor
- (C-15) Flooring and Floor Covering Contractors
- (C-16) Fire Protection Contractor
- (C-17) Glazing Contractor
- (C-20) Warm-Air heating, ventilation and Air Conditioning Contractor
- (C-21) Building Moving/Demolition Contractor
- (C-22) Asbestos Abatement Contractor
- (C-23) Ornamental Metal Contractor
- (C-27) Landscaping Contractor
- (C-28) Lock and Security Equipment Contractor
- (C-29) Masonry Contractor
- (C-31) Construction Zone Traffic Control Contractor
- (C-32) Parking and Highway Improvement Contractor
- (C-33) Painting and Decorating Contractor
- (C-34) Pipeline Contractor
- (C-35) Lathing and Plastering Contractor
- (C-36) Plumbing Contractor
- (C-38) Refrigeration Contractor
- (C-39) Roofing Contractor
- (C-42) Sanitation System Contractor
- (C-43) Sheet Metal Contractor
- (C-45) Sign Contractor
- (C-46) Solar Contractor
- (C-47) General manufactured housing Contractor
- (C-50) Reinforcing Steel Contractor
- (C-51) Structural Steel Contractor
- (C-53) Swimming Pool Contractor
- (C-54) Ceramic Mosaic Tile Contractor
- (C-55) Water Conditioning Contractor
- (C-57) Well drilling Contractor
- (C-60) Welding Contractor
- (C-61) Limited Specialty Classification