Who needs a Contractor License Surety Bond?
Construction contractors are typically required to be licensed or registered with their state or local regulating authorities, and they are often required to post a Contractor License Surety Bond as part of the licensing/registering process. Contractor License Surety Bonds are issued to guarantee that a contractor will operate their business in compliance with the regulations detailed in their license.
What is the purpose of a Contractor License Surety Bond?
These license and permit surety bonds serve as protection for the general public against unlawful actions and fraudulent agreements of service at the hands of their contractor. They also guarantee that the contractor will provide ethical and professional services at no harm or expense to their customers, in accordance with all applicable laws and regulations. Those who hire contractors that have been granted a Contractor License Surety Bond are assured that they have fully committed to the project’s completion as it has been agreed upon. Clients of a bonded contractor can also be protected against financial loss incurred if the project does not proceed as initially planned. If clients are dissatisfied with the services provided, they may file a claim against this surety bond for financial compensation.
How much does a Contractor License Surety Bond cost?
Pricing for this type of bond varies and is based on a number of different factors including the personal credit of the applicant, the state or local authority requiring the bond, bond amount and term length. Applicants with strong credit can expect to pay 1% – 3% of the total bond amount annually.
Pacific Surety offers industry low rates and can obtain approvals for almost all credit situations. Once our simple application has been completed, we can have pricing to you within hours. If you have any specific questions, please contact our knowledgeable underwriting staff.