Does your state require you to have a surety bond, often called a contractor’s license bond? Do you know the different requirements of each state? As a contractor, it is important that you understand how to obtain your contractor’s bond and why you should bring it.
First of all, what is a contractor’s license bond?
A contractor’s surety is purchased by a contractor as a guarantee to its clients of their compliance with state laws. This provides the customer Section Bonds with a financial guarantee. The details of size, the reasons for a payment, and what other types may be required differ from state to state.
Contractor license bonuses can be similar from state to state; however, there are important differences and requirements that must be understood. For example:
– License bonds are required by the Arizona Registry of Contractors.
– A bond is required to cover damages due to non-compliance with license standards.
– Bonuses vary by size from $ 2,500 to $ 90,000 depending on the type of license and the amount of work a contractor performs.
– Contractors who have done business in Arizona for less than a year must also obtain a sales tax bond.
– License bonuses are required by the California Contractors State Licensing Board (CSLB)
– A bond is required to cover damages caused by violations of the Contractor Licensing Law.
– All contractor license bonds are for $ 12,500
– Responsible Administrative Employees and Responsible Administrative Officers who own less than 10% of the business must obtain a separate bond of $ 12,500
– The CSLB may require a separate Disciplinary Bond for contractors who have been disciplined; the amounts of these vary.
New Mexico –
– License bonds are required by the New Mexico Department of Regulation and Licensing.
– A bond is required to pay the cost of repairing building code violations.
– All contractor license bonds are for $ 10,000
– License bonds are required by the Nevada State Contractors Board (NSCB).
– A bond is required to cover willful and deliberate violations of a construction contract, as well as employees injured by a contractor’s failure to pay wages.
– They vary in size from $ 1,000 to $ 50,000 and are established by the NSCB. Your decision is based on factors such as the type of business, experience, and the monetary limit granted.
– Residential pool and spa contractors must also obtain a consumer protection bond. The amount, also set by the NSCB, ranges from $ 10,000 to $ 400,000
– License bonuses are required by the Oregon Building Contractors Board (CCB) and the Oregon Landscape Contractors Board
– A surety bond is required in case the CCB orders the contractor to pay damages as a result of a final CCB order.
– They range in size from $ 3,000 to $ 75,000 depending on the endorsement classification of your license, as well as the amount of work a contractor performs. Contractors working on public works projects over $ 100,000 must earn a Public Works Bond of $ 30,000.