Louisiana Contractor Bonding Requirements
Contractors in some counties and towns need to post a contractor license bond as part of their licensing procedure. Louisiana does not currently have a mandatory bonding requirement for all contractors in the state, but certain contractors must still get bonded.
Contractors license bonds are a type of surety bond designed to protect the state and the public, and ensure that contractors comply with all relevant local and state provisions. If a contractor fails to follow the rules, an affected third party has the opportunity to file a claim and receive quick compensation from the bonding companies that backed the bond. However, it’s important for Louisiana contractors to understand that these bonds are not insurance for them. Even if the surety company pays for a claim, they will seek full reimbursement from the contractor.
Read the sections below for more information about the different types of contractor license bonds in Louisiana.
Questions about Contractor License Bonds
Which locations in Louisiana require a contractor license bond?
The following locations currently require a surety bond from contractors:
- Ascension Parish
- City of Lake Charles
Home improvement contractors in the state are also required to obtain a bond, regardless of their location.
What’s the cost of a Louisiana contractor license bond?
City of Lake Charles contractor bonds are set at $7,500, while Ascension Parish and Gonzales contractors need a $5,000 bond. This sum only refers of the maximum dollar amount of the compensation the bond can provide.
For other Louisiana contractor bonds, you need to contact your local authority and find out the total value of your bond. You can get a fairly close estimate of your yearly premium if you know you credit score. Applicants with good credit pay around 1% to 3% of the bond’s value. Those with a FICO of 650 or less typically see premiums in the range of 3%-10%. Check out the table below for a more detailed breakdown of costs:
|Bond Type||Surety Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Ascension Parish and Gonzales Contractor Bonds||$5,000||$100||$100-$150||$150-$250||$250-$500|
|Gonzales Contractor Bonds||$10,000||$100-$150||$100-$300||$300-$500||$500-$1,000|
Applicants whose credit score is low– or those who want to improve their chance of getting an even lower premium– should consider submitting additional information about their business. Items which can get you a lower premium include strong financial statements (business or personal), a resume demonstrating your rich industry experience and proof of your business’ age.
Check out our “What Does a Surety Bond Cost?” page for more information on bonding costs.
I have bad credit. How does that change the application process?
The application process for applicants with bad credit is no different. What changes is their premium– it’s usually higher because surety bonds companies want to account for the higher risk they undertake when underwriting the bond.
If you improve your credit score over time and take care to clear issues from your credit report, you can expect your premium to gradually go down. Keep in mind that new businesses and applicants with no credit score are also seen as a higher risk.
Check out our page on bad credit surety bonds for more information.
How do I apply for the bond I need?
To get your bond, all you have to do is submit our online application.
Afterwards, we’ll contact you with a free bond quote. If you submit ownership information, we will be able to give you an even more exact quote, because premiums are based on the credit score of all owners.
Under most circumstances, we can get your bond signed and shipped to you within just 1-2 business days.
How do I get licensed as a contractor in Louisiana?
Licensing requirements vary by type and location so the best way to prepare your application is to contact the local authority that requires the license. You can also check our guide on getting a Louisiana contractor license, which can serve as a good starting point.
Additional Information by Location
It’s important to understand the terms of the specific bond you are required to obtain, as this will reduce the likelihood of dealing with a bond claim.
Ascension Parish Contractors
Ascension Parish requires the four major types of trade contractors to get bonded:
Licenses expire annually on December 31, and a renewal application must be sent no later than January 1. A valid contractor's license bond must be in place before you can submit the renewal application.
City of Lake Charles Contractors
Contractors in the City of Lake Charles need to be well acquainted with the provision of Articles II, III, IV and VII from Chapter 6 of the Lake Charles Code of Ordinances.
In order to stay compliant, contractors in the city must renew their bonds on January 1 each year.
The Building Department requires permits and bonds for the following type of contract work: Electrical, Plumbing, Heating & Air, Building, Pools, Signs, Banners, Garage Sales, and Fences.
The website of the City of Gonzales contains a list of ordinances which you are required to comply with when doing construction work on city premises.
Still have questions about contractor license bonds in Louisiana? Call us at (877)-514-5146 and let us know how we can help.