A surety bond is needed for a contractor to become licensed. At present, 35 states currently require contractor’s to have these license bonds in place prior to issuing or maintaining a license. For some states, the bond is only required if the amount of work done within the state exceeds a specific value. In California you can complete the contractor license bond form and obtain your license.
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There are many different license bonds available and it’s worth understanding all the different contractor bonds and performance bonds you can get. Whether you’re looking at Utah contractor bonds to Nevada contractor bonds, they’re needed. It’ll help provide that security you need when it comes to operating within the construction industry and where there are certain expectations that need to be met.
Contractor license bonds provide protection if the contractor should fail to provide or complete the job, as well as financial obligations that they may have such as paying for supplies/materials and subcontractors too.
Contractor License Bonds By State
Many of the states are different when it comes to obtaining this type of bond, so here are just a few states in which you’ll want to be aware of when it comes to getting said bonds.
Colorado Contractor Bonds
The city of Denver for example, requires contractors to post a surety bond for city public works when it comes to sewer contractors, sidewalk contractors, paving contractors, etc. Along with Denver, local contractor licenses and permit bonds will be needed in Colorado Springs, Englewood, Aurora, Fort Collins, Arvada and Pueblo Trinidad. The cost of these bonds in this state can vary from $10,000-$50,000.
Oregon Contractor Bonds
For Oregon, these bonds are licensed by the Oregon Construction Contractors Board. The bond amount varies between $10-$20,0000 for residential contractors and $20-$75,000 for commercial.
Arizona Contractor Bonds
In the state of Arizona, it’s the Arizona Registrar of Contractors who require contractor license bonds. These can vary from $2,500 to $100,000. The specific amount will depend on the type of license type and business. A taxpayer bond for contractors might also be needed by specific contractors too.
California Contractor Bonds
California contractors should have one or more of the surety bonds which include a contractor’s bond, a bond of qualifying individual and a disciplinary bond. There are also cities in California that require job specific license or permit surety bonds too, so it’s worth finding out what these are for each area in question.
Washington Contractor Bonds
In the case of Washington, the common types and amounts for various contractor types are $12,00 for general contractors, $6,000 for speciality contractors and $4,000 for electrical/telecommunication contractors as examples. There’s several specific city and county contractor bond requirements that are important to look at too if you’re based in those cities or counties.
Idaho Contractor Bonds
Contractor bonds where contractors are engaged with various types of building work in Idaho would be subject to surety bonding requirements. These bonds are mandated for the sake of protecting the health and welfare of the people. Bonds vary up to $25,000.
Nevada Contractor Bonds
With bonds up to $25,000, Nevada contractors are required to post surety bonds as mandated by Nevada Contractors’ Board. The bond amount varies on license type, financial position, as well as their experience.
Utah Contractor Bonds
A contractor’s license bond is needed as requested by the State of Utah’s Department of Commerce Division of Occupation and Professional Licensing. Counties and local areas in Utah, will have various requirements when it comes to contractors for surety bonds. Bonds can go up to $50,000 in cost.
Other Types Of Contract Bonds
There are plenty of other bond types that are worth knowing about and so with that being said, here are the more common ones that would usually be included.
Construction Performance Bonds
With construction bonds, you have construction performance bonds which can ensure the work that you’ve requested is guaranteed to get done, otherwise you would be able to sue the contractors for not completing the project to the level of quality you laid out in the contract.
Subcontractor Performance Bonds
For project-specific agreements between a subcontractor and guarantor, the subcontractor performance bond is a must-have. This can protect you from having a subcontractor fail to complete the work and having no back-up. A guarantor provides that back-up on behalf of the subcontractor.
A payment bond is a legally required bond for any government and state contracts. This is to ensure all subcontractors, material suppliers and laborers are paid. These are often confused with performance bonds but as described above, they’re different.
A bid bond is something that’s required by the owner of the project. It’s a guarantee that the bidder will end up entering into the contract if it’s awarded the job. A penalty amount is incurred if this is broken which is usually 10% of the estimated project value.
Subdivision Contractors Bonds
This type of bond is needed for contractors who are working on local authority or government projects. Whether it’s helping to maintain the sidewalk or assisting with grading changes and electrical upgrades. It ensures the authority commissioning the work will have it completed successfully by the contractor.
Get A Contractor License Bond From The Professionals
Contract bonds are an important thing to put in place when it comes to contracts and it’s essential to be detailed when you’re outlining your needs and requirements in any type of construction project. The devil is certainly in the detail to ensure you’re getting exactly what you want and nothing less. If you receive a quality of work or standard that isn’t met, then you can easily take the contractors to court and get your money back.
If you’re looking to acquire a bond or need more advice on what bonds to include in your contracts, then getting in touch with us here at Pinnacle Surety is the right move to make. We can help ensure that you have the right bonds in place to help protect you and your business.