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North Carolina General Contractor License Bond
Contractors in North Carolina are required by the North Carolina Licensing Board for General Contractors to be licensed and bonded. Depending on the maximum size of projects undertaken contractors need either a $175,000 Limited, $500,000 Intermediate, or $1,000,000 Unlimited Contractor Bond.
Jet Insurance Company offers savings when compared to agencies and brokerages as you are purchasing directly from the carrier. Additionally, with middlemen out of the way you can secure your bond quicker and in most cases online in minutes.
How Is the Pricing Determined for My General Contractor License Bond?
For Limited Licensed Contractors bond rates start at $175 a month or $1,750 if paid upfront for the year. Jet’s monthly offer is unique in the industry as it is a filed rate and can be canceled at any time, while others can only offer financing containing fees and cancellation provisions.
Intermediate Contractors can get the bond starting at $500 monthly and Unlimited Contractors start at $1,000 a month. Rates for these surety bonds are based upon the personal credit of the principal (owner).
| Bond Type | Bond Limit | Monthly | 1 Year Term |
|---|---|---|---|
| Limited | $175,000 | $175 | $1,750 |
| Intermediate | $500,000 | $500 | $5,000 |
| Unlimited | $1,000,000 | $1,000 | $10,000 |
If you do not automatically get a quote online, an underwriter will need to review the submission. We may require financial statements to be submitted for review before we can offer the bond at the appropriate premium amount. And don’t worry, they do not need to be audited financials.
How Does North Carolina Determine Which Contractor License Is Needed?
The North Carolina Licensing Board oversees licensing of contractors based on the laws outlined in Title 21 of the North Carolina Administrative Code. The following list of general contractors are required to be licensed with the NC Licensing Board and must have passed examinations and have appropriate bonding:
- Building Contractor
- Residential Contractor
- Highway Contractor
- Public Utilities Contractor
- Specialty Contractor
Specialty includes the following classes: Grading, Excavating, Boring, Tunneling, Communications, Concrete, Electrical-Ahead of Point of Delivery, Fuel Distribution, Water Lines, Sewer Lines, Water Purification, Sewage Disposal, Insulation, Interior Construction, Marine Construction, Masonry, Railroad, Roofing, Metal Erection, Swimming Pools, Asbestos, and Wind Turbine.
Irrigation contractors and landscaping contractors are not under the jurisdiction of the North Carolina Licensing Board. You can click on the appropriate link to read more or apply for a surety bond for either of those classes.
There are three types of licenses that any of those general contractor classifications above will fit into and those license types depend on the size of projects performed. The listed chart below shows the max value of a single project allowed with three possible license classes: Limited, Intermediate, or Unlimited.
| Bond Type | Max Project Value |
|---|---|
| Limited | $20,000 |
| Intermediate | $15,000 |
| Unlimited | $20,000 |
The surety bond is only required by contractors in North Carolina if they cannot prove a certain level of financial security with the License Board.
Limited licenses are for smaller contractors that might operate with the liquidity necessary to have the bond. Proving financial security through an audited financial statement can be expensive, stressful, and time-consuming for Intermediate and Unlimited licenses. If a contractor chooses not to obtain a surety bond they will have to abide by the reporting requirements below.
| Bond Type | Assets in Excess of Liabilities | Net Worth | Audited Financial Statement |
|---|---|---|---|
| Limited | $17,000 | $80,000 | No |
| Intermediate | $75,000 | N/A | Yes |
| Unlimited | $150,000 | N/A | Yes |
Why Does North Carolina Have Financial Security Requirements for Contractors?
The North Carolina Licensing Board for General Contractors’ goal is to protect the public, specifically the interests of project owners. If financial damages occur through negligent or fraudulent acts by the contractor and the contractor does not remedy the situation, then the surety bond provider would step in to make the situation whole.
This bond is not just for the benefit of the State and the public, but for contractors as well. Jet Insurance Company can provide a level of financial credibility to your business to avoid having to prove a certain level of financial standing. Therefore the bond is used in place of audited financials and business liquidity as an adequate guarantee of public protection.
This surety bond helps the Board of General Contractors’ goal to protect the public from any unlawful or unprofessional acts. In reality, it is a level of coverage should a contractor not uphold their warranty.
How to Apply for the North Carolina General Contractor License Bond With Jet
Jet makes this whole process quite easy as you are dealing directly with the decision-making carrier. Just fill out the application at the link below to get started.
Most contractors will get a quote automatically online. In some cases, an experienced underwriter will need to review your submission and will contact you should more information be needed about your business.
Once you purchase your bond, Jet Insurance will email the signed bond to the Board. You will also receive a physical and electronic copy of your bond for your personal records.
Should it be necessary for you to file the bond, you can mail it to the following address:
Licensing Board For General Contractors
5400 Creedmoor Rd.
Raleigh, NC 27612
How Do I Cancel My Bond? Can I Get a Refund?
If you decide to cancel your bond, just email us at [email protected]. There is a cancellation grace period of 30 days that will give the public extra time to submit complaints or claims before the bond expires. State governments love this provision as it protects against businesses who decide to cancel their license and bond, but still have some outstanding work.
If you decide to pay the annual premium in full, you may be entitled to a prorated refund based on the amount of premium earned up to the point of cancellation.
What Is the Renewal Process for My General Contractor License Bond?
This bond is continuous and will not expire as long as the contractor remains properly licensed through the Board and we receive payment.
The only renewal process that exists with Jet is if you decide to pay the annual premium. But in that case, all we need is payment to keep the bond rolling.
What Do I Do if I Receive a Claim?
Immediately contact Jet Insurance Company as soon as you get word a claim against the bond will be made. Someone from our team will assist you and walk you through the claim processes and how best to proceed.
Should a claim be made against the bond we will review the claim details and any supporting documents. We will then figure out the best course of action to take to handle the claim.
Over the last few years, there has been a very limited number of valid surety claims against contractors in North Carolina, but that does not mean they will not happen. Should a valid claim be filed, Jet will make payment to cover the damages caused up to the bond limit.
What Is Covered by the Homeowners Recovery Fund?
The North Carolina Board has an established pool of funds that can be dispersed to homeowners if a contractor fails to perform accordingly. The Board has the option to collect these reserves from contractors when they apply for a residential project, whether that be a new build or an alteration.
The fee collected would be $10 for each dwelling unit applied for. If your application is for a duplex, your fee would be $20. If you apply for a 100-unit apartment complex, your fee would be $1,000.
The funds are dispersed to applicants that are chosen by the Board. This can happen after any hearing, but the Board makes it very clear that all payments are to correct valid claims. These payments, as outlined by the Board, are a privilege and not of right.
