Iowa Contractor License Bond

The state bonding requirements apply only to out-of-state contractors working in Iowa. They have to provide a bond to the Iowa Division of Labor’s Contractor Registration.

A number of cities across Iowa may also require Iowa contractors to get a license bond. Some of them include Johnston, Eldridge Davenport and Bettendorf, among others.

Before you start your licensing, it’s best to check with your local authority whether you need to provide a bond.

The surety bond price depends on the bond amount you are required to provide. If you are an out-of-state contractor, you have to post a $25,000 bond.

Contractors may also need to post a bond between $5,000 and $10,000 to get a license from their city authorities.

Whatever your bond value is, you’ll pay only a fraction of this bond amount. This is called the bond premium. If you qualify for standard bonding, the premium can be between 1% and 5% of the amount. For a $10,000 bond, this means a price in the range of $100-$500.

How is your Iowa contractor license bond cost set? When you apply with a surety, you will have to showcase the strength of your finances. The surety will examine your personal credit score, company finances, as well as assets and liquidity. If the risk of getting you bonded is low, your bond price will be lower too.

For a full overview of how your bond price is set, you can consult our surety bond cost page.

Lance Surety Bonds runs a Bad Credit Surety Bonds program to help contractors with financial issues to obtain the bonds they need. If you have a low credit score, tax liens, bankruptcies, or civil judgements, you can still get bonded with us.

The usual bonding rates are between 5%-10%. As the bonding risk is higher, the increased premium compensates for it. We work with a number of A-rated, T-listed surety companies, so we can still find the best bonding rate for your particular situation.

Apply online today to get your free Iowa contractor license bond quote. If you want to know your exact bond price, complete our full application and send your paperwork. We’ll deliver it in no time.

Need more information about the bonding process? Make sure to go through our How to Get Bonded page for further details.

Lance Surety Bonds’ specialists are here to help. Just call us at (877) 514-5146 and we will assist you with your application, or answer any questions you might have.

Your Iowa contractor license surety bond does not work like insurance for your contracting business. Instead, it’s there to protect your customers from fraud, misuse and non-completion of construction work, and to protect licensing authorities from non-payment of taxes or failure to follow local and state rules.

If you do not abide by state and city laws, this can lead to a bond claim. If the claim is proven, you will have to compensate affected parties up to the penal sum of your bond. Your surety will initially cover the costs, but you will have to reimburse it afterwards. This means that bond claims are a serious financial threat. The wisest course of action is to avoid them.

Iowa construction contractors need to register with the Iowa Department of Labor. They have to follow the respective procedure set by the licensing body. The Iowa Contractors Guide is an excellent starting point for the licensing process.

Additionally, city authorities may require contractors to get licensed locally. You should check the exact requirements for your area.