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New York City Home Improvement Contractor Bonds Explained
In order to start a business as a home improvement contractor in New York City, you have to get a city license. For this purpose, you have to provide a security instrument, which can be in the form of a home improvement bond.
The goal of your bonding is to provide a safety net for your customers against potential illegal activities on your side. Thus, it ensures your legal compliance.
Your home improvement bond represents a contract between three entities, with your business as the principal. The New York City Department of Consumer Affairs is the obligee that sets the licensing requirement. The surety is the third party, which is the bond provider.
Questions about Bonds By State
When is this bond needed?
The NYC Department of Consumer Affairs (DCA) requires home improvement contractors to get licensed in the city. The process includes providing a DCA trust fund enrollment or a surety bond in the amount of $20,000. The required security mechanism ensures you will follow applicable laws in your work as a home improvement specialist.
How much does the bonding cost?
The NYC home improvement contractor bond requirement is set at $20,000 for applicants that don't obtain a trust fund enrollment with the DCA. This is the bond amount set by the city authorities. To get bonded, however, you only have to pay a bond premium, which represents a small percentage of the required amount.
When you apply with a surety provider, it will examine your personal and business finances in order to set your exact surety bond cost. The most important indicators include your personal credit score, company finances, and fixed and liquid assets that you may showcase. By assessing these factors, the surety evaluates the bonding risk. The lower it is, the smaller your bond premium would be. The usual rates for applicants with good credit are between 0.75% and 5%
New York City Home Improvement Contractor Bond Cost Based on Credit Score | |||||
---|---|---|---|---|---|
Surety bond name | Surety bond amount | Above 700 | Between 650-699 | Between 600-649 | Below 599 |
Home improvement bond | $20,000 | $150-$300 | $200-$500 | $500-$1,000 | $1,000-$2,000 |
Can I get this bond with bad credit?
Lance Surety Bonds runs its Bad Credit Surety Bonds program for applicants struggling with a low credit score, tax liens, bankruptcies, and civil judgments. If you are facing such issues, this is a great bonding option for you.
The rates in this program range between 5% and 10%. This is due to the higher bonding risk. Nevertheless, you can get a top bonding premium with us due to our excellent partnerships with a number of A-rated, T-listed surety companies.
How do I obtain my bond?
You can apply for a home improvement contractor bond by filling out our online application form (it takes 5min). Then you need to attach your paperwork, so that we can assess your exact bond cost. Once you receive the quote, you can purchase the bond online.
Would you like to learn more about the bonding process? You can get a full overview from our How to Get Bonded guide.
Still have questions? Just call us at (877) 514-5146.
How are bond claims handled for home improvement contractors?
The bond that you obtain for your NYC home improvement license serves as a protection mechanism for city authorities as well as for your customers. If you fail to follow applicable laws, you can receive a claim against the bond.
Claimants can demand reimbursement up to the penal sum of the bond, which is $20,000. If the case is proven, you are liable to pay the entire compensation. The surety that bonded you may do so at first, but you will need to cover the costs shortly after. Thus, it is best to avoid claims, as they can cause major issues for your business.
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Quick response times and turn around for issuing bonds. Great customer service and very knowledgeable. We have used Lance Surety multiple times and have never been disappointed. Highly recommend them and Collette!
Long story short, these guys cut through the B.S. and get the job done. Responsiveness, excellent! Communication, excellent! Respect for their industry partners, excellent! John, Collette, Ryan, you're all-stars! Thank you!
We decided for Lance Surety Bond's quote for 2 reasons; Price and Customer Service. Our Representative Ryan was just SUPERB!! [...] I highly recommend Lance Surety Bond for all your Bonding needs! I'll definitely come back for all of mine. :-) Thanks Ryan!
Quick response times and turn around for issuing bonds. Great customer service and very knowledgeable. We have used Lance Surety multiple times and have never been disappointed. Highly recommend them and Collette!
Long story short, these guys cut through the B.S. and get the job done. Responsiveness, excellent! Communication, excellent! Respect for their industry partners, excellent! John, Collette, Ryan, you're all-stars! Thank you!
We decided for Lance Surety Bond's quote for 2 reasons; Price and Customer Service. Our Representative Ryan was just SUPERB!! [...] I highly recommend Lance Surety Bond for all your Bonding needs! I'll definitely come back for all of mine. :-) Thanks Ryan!