Contractor License Bonds

Contractors in most states are required to carry a contractor license bond in order to become licensed, regardless of their trade. The bond requirements and limits vary. The requiring entity can be the state, county, city, or there may not be a requirement at all depending on the location of the contractor, and the type of work being performed.


What Does a Contractor Bond Cost?

Contractor license bond prices vary from as low as $50 to thousands of dollars depending on the bond requirement and the surety bond companies underwriting factors. These underwriting factors include the contractor’s personal credit, years in business, classification, current bond status, and license history. Bond rates generally range from 1-10% of the bond limit.

The price offered for a contractor bond is not the most important factor when considering a bond company. Jet has positioned itself as the first direct writer of contractor bonds. Jet’s streamlined process will allow the bond to be purchased affordably and efficiently and ensure the bond is filed correctly and promptly. It should be noted that with Jet’s efficiency as a direct bond writer, our rate can be often beat out the rest of the market. If another carrier is lower, we will offer that carrier’s bond rate to the contractor. We understand it can be pricey to become a contractor and maintain your business, which is why we offer a monthly payment option on almost all surety bonds.

What Is the Purpose of a Contractor License Bond?

Some states, counties, or cities have a requirement for a contractor to purchase a surety bond in order to be licensed and perform their contractor trade. For the contractor the purpose of the bond is to be allowed to work legally, but for the government entities requiring the bond (known as an obligee in surety terms) the purpose of the bond is to protect the public from the actions of the contractor.

If a licensed contractor breaks their contract or causes financial damage to others, then a claim can be made on their contractor license bond. The bond is a guarantee by the surety company who issued the bond to make the claimant whole or at least make payment up to the maximum limit of the bond.

It is always in the best interest of a contractor to not let a dispute get so far as to have a claim on their bond. If there is a bond payout to a claimant, the contractor will still have to pay the surety company back for the losses. This is part of the statutes of the surety bond no matter the carrier. The fact that a surety bond has to be paid back after a claim is the main difference between a contractor’s surety bond and any other type of insurance.

What Can I Do if I Get a Claim on My Contractor License Bond?

Most contractors have never dealt with a claim and if asked about getting a future claim, they never will. Yet, even the most upstanding contractor might be hired by an unreasonable homeowner and find themselves with a claim against their bond.

A contractor’s best course of action is to contact the claimant and try to reach a resolution, which most likely means getting back on the jobsite and fixing the issue. However, if there is a claim, it is the result of two parties unwilling to find an agreement and the surety company will have to step in.

The surety company will need to contact the contractor in regards to the claim which will start the clock on the surety process. A contractor needs to be communicative and deliver all requested information to the surety in a timely fashion. This will give the contractor the best opportunity to have a frivolous claim denied and avoid increasing legal fees.

If a bond claim payment is made by the surety to the claimant, the contractor still has the responsibility to pay back the surety company the full amount of the bond payout and any incurred legal fees. Should the contractor refuse to pay back the surety company, the contractor would be subject to disciplinary action, such as suspension of the contractor’s license, with their governing licensing department.

What Other Insurances Are Contractors Required to Have?

For every type of risk on the job site there is a related coverage. The contractor license bond is financial protection for the public from contractors. Certain states may have other types of bonds required to perform contracting work.

Any contractor that employs workers must carry workers’ compensation to protect their employees from injury. Most states require the contractor to file proof of coverage.

General liability coverage protects third parties from damages arising from the work done by a contractor. Some states require a policy to be in pace in order to be licensed.

Where Are Contractor License Bonds Required?

Within all US states, there is a contractor bond requirement of some kind, but not all bond requirements run to the state. Many cities and counties have their own requirements. "Contractor license bonds" are only required in a handful of states, but there are other bond requirements. Below are the states Jet Insurance Company is licensed in and the respective construction bond pages.

All Construction BondsContractor License Bond Requirements
Residential Roofer
Waste Water Contractor
House Moving
Manufactured Housing
ArizonaContractor License
Home Inspector
Mobile/Manufactured Home
Contractor Taxpayer
District of ColumbiaComing Soon...
FloridaComing Soon...
GeorgiaComing Soon...
IndianaComing Soon...
LouisianaComing Soon...
MontanaComing Soon...
NebraskaComing Soon...
NevadaComing Soon...
New MexicoComing Soon...
North CarolinaIrrigation Contractor
Landscape Contractor
Mobile Home Dealer
Mobile Home Manufacturer
Modular Building Set-Up
Mobile Home Set-Up
Greensboro Contractor License
Winston-Salem Contractor License
Wake County - Well Contractor
Home Inspection
Statement of Bonding Ability
North DakotaComing Soon...
OhioMobile Home Dealer/Installer
Sewage Treatment System Contractor
Private Water Systems Contractor
Well Drilling
OklahomaComing Soon...
OregonContractor License
Landscape Contractor
Sewage Disposal
Water Well Contractor
Restricted Residential Contractor
Developer License
TexasComing Soon...
West VirginiaComing Soon...
Contractor License Bonds