Hawaii Contractor License Bond Requirements
The state of Hawaii requires that certain types of contractors obtain a surety bond known as a ‘contractor license bond.’ Its purpose, similar to other surety bonds, is to provide an extra layer of protection for the public, specifically people or entities that enter into contracts with the licensed contractor.
If a third party suffers damage or loss as a result of the contractor’s actions, they can seek recourse from the surety bonds company that underwrote the bond. It’s always up to the contractor, however, to cover all claim costs.
Hawaii contractors need to comply with provisions of the Chapter 444 of the Hawaii Revised Statutes in order to stay out of bond claims.
Explore the Q&A section below for answers to some commonly-asked questions about these types of bonds.
Which contractors need to provide a bond in Hawaii?
The bonding requirements extends to specialty and general contractors, and also to all contractors who wish to enter contracts with the state.
Frequently Asked Questions
How much does a contractor license bond cost in Hawaii?
Unlike many other states, bond amounts for Hawaii contractor license bonds aren’t fixed. Rather, they are determined by the Contractors License Board on a case-by-case basis. This is why you should contact the Board to find out what the required total amount in your case is, before you apply. The minimum total amount for a contractor license bond in Hawaii is $5,000.
Once you know your total amount (i.e. the maximum coverage of the bond) it’s easy to calculate your premium. For applicants with a high credit score, it generally ranges between 1%-3% of the bond amount, but may go up to 10% for applicants with poor credit or other credit report issues.
Our “What Does a Surety Bond Cost” page contains more details on the factors your premium depends on.
Can I get bonded if I have bad credit?
Yes, you can definitely get bonded despite a low credit score or certain credit issues. However, surety bonds companies consider bad-credit applicants to be high risk, so your premium will definitely be higher than that of standard market applicants.
You can take steps to ensure you get a lower premium by improving your credit score, and clearing past-due items from your report. If you have strong personal or business financial statements, cash on hand (or other liquid assets), or even a lot of experience in the construction industry, you can submit proof to the surety. All of these factors can drive your premium down as they signal trustworthiness and the ability to make good on claims.
Learn more about bad credit surety bonds on our specially dedicated page.
How do I apply for my contractor license bond?
We’ve made the application process as simple as possible. You can apply online and securely pay for your premium. After you submit our online application, one of our agents will contact you with details on completing the application.
It’s a standard practice for principals to sign indemnity agreements with the bonding company, which means that if the surety pays for any claims, you will pay it back. After signing the agreement and paying your quote, your bond should be ready within one or two business days.
If you wish to know what kind of information is required on your bond, you can check out the Hawaii contractor license bond form here.
What happens in case of a claim against my bond?
Understanding the Hawaii building code and your obligations as a contractor is essential for staying out of claims. If one of your clients or the state files a valid claim, you are obliged to pay it. Failure to do so means the surety will have to pay it, but this is the less favorable scenario as other bonding companies may refuse to sign a bond for you if you’ve had a history of claims.
If you feel the dispute is groundless, you can contact the surety bonds company and explain the case. If you have sufficient proof that you are not in the wrong, the surety can help you with legal assistance when the claim goes to court.
Hawaii contractor license bonds protect your employees as well, so you also need to pay all wages on time and as per the contract.
How do I get a Hawaii contractor license?
The criteria vary depending on the type of license you wish to apply for. However, some of the common requirements include:
- Buying workers’ compensation insurance
- Designate a Responsible Managing Employee (RME)
- Complete a registration with the Business Registration Division
- Submit financial statements
- Submit credit report
- Submit tax clearance
- Pay applicable fees
This is not an exhaustive list of requirements, so for both your license and bond, it’s best to be in contact with the Contractors License Board at:
Contractors License Board
DCCA, PVL Licensing Branch
PO Box 3469
Honolulu, HI 96801
Still have questions about Hawaii contractor license bonds? Call us at (877)-514-5146 and let us know how we can help!