Rhode Island Contractor License Bonds Explained
A number of different contractor specialists have to undergo a licensing procedure in Rhode Island if they want to operate in the state. For some license types, such as underground utility contractors, a contractor license bond is one of the requirements that have to be satisfied.
As with other types of bonds, this license bond ensures you will adhere to the legal framework in Rhode Island in your professional activities. It functions as a safety mechanism that protects the state and the general public.
In essence, the bonding that you obtain works as a contract between your business as the principal, the Rhode Island Contractors' Registration and Licensing Board as the obligee, and the surety as the bond provider.
Questions about Contractor License Bonds in Rhode Island
Who has to obtain a contractor license bond in Rhode Island?
In Rhode Island, underground utility contractors who engage in any kind of installation, repair and/or replacement of sewer lines, water lines, and storm drainage lines, have to obtain a $20,000 surety bond. This is an essential part of the licensing procedure with the state's Contractors' Registration and Licensing Board. The purpose of the bond is to guarantee that the contractor will fulfill their legal obligations in relation to any underground utility works, which should be executed in line with the standards set by the Department of Public Works.
What are the surety bond costs?
The surety bond amount that you need to obtain for your Rhode Island contractor's license as an underground utility contractor is $20,000. In order to get bonded, you have to cover a small fraction of this amount, called the bond premium. It is determined on the basis of your personal and business financials.
When evaluating your surety bond cost, your surety needs to take into consideration your personal credit score, business finances, and any liquidity and assets you may have. By assessing these indicators, it aims to measure the level of risk involved in providing you with a bond. The lower it is, the smaller your bond premium will be.
|Rhode Island Contractor License Bond Cost Based on Credit Score|
|Surety bond name||Bond amount||Credit Score|
|Above 700||Between 650-699||Between 600-649||Below 599|
|Underground utility contractor bond||$20,000||$150-$300||$200-$500||$500-$1,000||$1,000-$2,000|
Can I get bonded with bad credit?
It is possible to get a Rhode Island contractor license bond even if your finances are not perfect. If you are facing issues such as a low credit score, tax liens, bankruptcies, and any civil judgments, you can make use of our Bad Credit Surety Bonds program.
As the bonding risk is higher, the bond premiums are typically between 5%-10%. Due to our partnerships with a number of A-rated, T-listed surety companies, however, you can still obtain a top bonding option with us.
How Do I Get Bonded?
You can follow these steps to obtain your contractor license bond:
Our bonding experts will send you a free, no-obligation quote
You can then purchase the bond online
We will deliver to you a digital and a hard copy of your bond
The How to Get Bonded page provides extensive information about the intricacies of the bonding process.
For further queries, or if you need assistance with your application, you can call us at (877) 514-5146.
What happens if I get a claim against my bond?
If you fail to fulfill your obligations as a licensed and bonded underground utility contractor in Rhode Island, you may face a claim against your surety bond. This is how fair compensation can be sought for any damages that you may have caused. The maximum penalty can be up to the full bond amount, which is $20,000 in this case.
On proven bond claims, the surety that has bonded you may pay the costs initially. You are obliged to repay it in full afterwards, as per the bond indemnity language. Thus, claims can bring serious financial problems for your contracting business, and it is best to avoid them.
Still Have Questions? Check Our FAQ Pages
What Our Clients Have To Say?
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