What is an Alaska contractor license bond?
The state of Alaska requires several type of contractors to post a contractor license bond before they can get licensed. These types of bond are posted for the protection of the general public and the state, so you shouldn’t confuse them with insurance.
More specifically, Alaska contractors are required to comply with the provisions of the Alaska Statutes (AS), Title 8, Chapter 18, Construction Contractors and Home Inspectors. According to Section 71, by posting a bond, contractors are agreeing to pay all taxes and fees they owe to the state, as well as pay all laborers and suppliers. The bonds also protect project owners in cases of negligent work.
If a contractor violates any of the provisions of applicable laws and regulations, they can face a claim aiming to provide compensation to a claimant who has suffered losses as a result. Any valid claim not settled by the contractor, will have to be reimbursed by the surety bonds company. However, the final responsibility lies with the contractor.
Frequently Asked Questions
Who needs an Alaska contractor license bond?
The bonding requirement does not apply to all contractors. Currently, the following contractors need to get bonded:
- Specialty contractors
- General contractors
- Residential contractors
- Mechanical contractors
- Home inspectors
How much does an Alaska contractor license bond cost?
The cost of your bond depends on your license type. Each license type requires a different bond amount, which refers to the maximum penal sum of the bond. The contractor pays a yearly premium, usually just a few percentages of the total amount. Take a look at the table below for more detailed information.
|License Type||Surety Bond Amount||Credit Sore|
|Above 700||Between 650-699||Between 600-649||Below 599|
|All contractors (projects valued $10,000 or more)||$5,000||$100||$100-$125||$125-$250||$250-$500|
|Mechanical and Specialty Contractors
Keep in mind that the premiums provided are just estimates based on the applicant’s credit score. After an evaluation of your business’s status, including financial strength and years of operation, your premium can change in an upward or downward direction. You can find out all about the factors influencing your premium on our What Does a Surety Bond Cost? page.
If you want to get an exact quote, you can submit our online application at any time.
Can I get bonded with bad credit?
These types of bonds are subject to consideration by bonding companies, meaning that your credit score and those of all co-owners play an important role. However, in our experience, 99% of applicants can still get bonded, despite bad credit or credit report past due items. The only difference is that they need to pay a higher premium. This is the surety’s way of offsetting the increased risk it undertakes by signing the bond.
However, circumstances such as open bankruptcies and late child support payments can prevent your from getting bonded. You can learn more about the underwriting process with bad credit on our dedicated page.
How do I apply for my Alaska contractor license bond?
You don’t need to worry about the application process– it’s quite simple. In our online application, all you have to do is choose your state and bond type and provide contact information.
Next, we’ll get in touch with you with a free bond quote, and information on how to complete the rest of the application. You will need to sign an indemnity agreement with the surety which is standard across the industry. Finally, you can expect your bond form in your mailbox and request digital copies via fax or email.
If you have any questions about the application process for an Alaska contractor license bond, give us a call at (877)-514-5146. We’re always happy to help.
What happens in case of a claim?
To stay out of claims, it is essential to understand all your obligations under Alaska law, and adhere to the terms of all contracts you enter.
You can face a claim if someone suffers damage or losses as a result of your unlawful actions. You will be notified of claims against you and you are obliged to make good on them. Failing to do so is more troublesome, as the surety will be forced to reimburse the claimant and then seek legal actions against you. This makes the whole process not only more time-consuming, but more costly. Most importantly, you may not be able to get bonded if you have past claims in your history.
How do I get a contractor license in Alaska?
There are three types of contractor licenses you can apply for in the state of Alaska: mechanical, specialty and general. Requirements can vary, so the best way to verify that you have completed all of them is to contact the Department of Commerce, Community and Economic Development.
Here are some of the requirements in addition to the contractor license bond:
- Get public liability and property damage insurance
- Get workers’ compensation insurance (if you employ other people)
- Pay applicable fees
- Choose up to 3 specialty trades (for specialty contractors)
- Get Residential Endorsement (for residential contractors)
- Apply for an Alaska Business License
All licenses (and contractor license bonds, respectively) need to be renewed once every two years. Residential and general contractor licenses expire on December 31 of even years, while specialty and mechanical contractor license expire December 31 of odd years.