What is a Contractors License Surety Bond?
Many states, cities, counties and municipalities require contractors to post a surety bond in order to be licensed as a contractor and perform work within their territory. Contractor's License Surety Bonds provide different coverage's in different locales and therefore may have different requirements to qualify for them with varying premium rates. Apply now to get a free, no obligation surety bond quote!
Below are a few different types of Contractor's License Surety Bond:
Compliance Contractor's License Surety Bonds
Are required to secure the contractor's license and provides a guarantee that the contractor will comply with all of the statutes and codes. Since the liability to the surety company is minimal, they are usually easy to qualify for and will have a lower premium rate associated with them.
Payment and Performance Contractor's License Surety Bonds
Are required to secure the contractor's license and provide protection to the citizens of the state, suppliers and laborers who perform work for the contractor. These bonds provide a payment guarantee in the event the contractor doesn’t pay for labor or materials or does work that is not up to the required standards and a performance guarantee that the contractor will work in accordance with all codes and underlying statutes. These bonds pose a higher risk to the surety, due to the guarantees they represent, the premiums are at a higher rate.
Contractors Tax Guarantee Surety Bonds
Are required to provide a guarantee that the contractor will pay any and all required taxes that are owed to the obligee during the scope of their work.
Out of State Contractors Tax Surety Bonds
Are required to provides a guarantee that a contractor, who is not domiciled in the state, will pay any and all required taxes that are owed to the obligee during the scope of their work while they are working in the state.
Contractors Permit Surety Bonds
Are required to provide guarantees much like that of the Compliance Contractors License Surety Bonds, guaranteeing that the contractor will perform work in accordance and up to the standards of the underlying code.
Right Of Way Contractors Permits Surety Bonds
Are required from contractors who are wanting to perform work within or adjacent to public rights of way. The risk and premium rate is typically low.
Other types of Contractors Bonds
Contract Surety Bonds can also be required of contractors performing work related to a contracted job. If you are being required to post a contract surety bond, also known as bid bonds, payment & performance bonds or final bonds, we can help!
How much does a Contractors License Surety Bond Cost?
As is true with all commercial surety bonds, the cost or "premium" can vary depending upon the particular bond risk, bond amount, credit and or financial strength of the business owner(s) and even the state that is requiring the bond. Underwriting requirements can also vary. Some bonds require a credit report and the possibility of a financial statement, others will only require a couple of brief questions to be answered and some are Instantly Issued, meaning no underwriting is necessary! We have partnered with some of the top surety companies in the industry to offer the lowest bond rates for your contractors bond.
Can I still get a Contractors License Surety Bond with Bad Credit?
Since credit is a large part of the underwriting process for most surety bonds, it can be a big concern for those with credit issues when applying for a surety bond. Not to worry! A1SuretyBonds.com has partnered with one of the premier surety companies to offer Bad Credit Surety Bonds to those who suffer from credit issues or whose credit is on the mend. Yes, your premium will be higher than that of someone that has good credit, but we can still get you the bond you need and we guarantee it will be the lowest rate based upon your situation.
Who does a Contractors Bond protect?
It is a common misunderstanding that surety bonds provide protection to the contractor. The reality is that a surety bond provides protection to the general public by guaranteeing that the contractor will comply with the laws, rules and other requirements of the governing body or obligee. The surety bond is a binding contract, wherein the surety company extends their credit on behalf of the principal (contractor) to the obligee (usually the State, City, County or Municipality). If the contractor defaults or otherwise fails to meet the terms of the obligations of the bond or license, the bond will provide compensation for damages under the terms of the bond.
Find your state and apply for your Contractors License Surety Bond. Let our expert staff get the bond you need at the lowest possible price! We work fast so you can stay focused on your business!