North Carolina Contractors License Bond Requirement
Unlike other states, North Carolina doesn’t have a statewide bond requirement for all contractors. Instead, these bonds are required in several cities and from certain types of contractors.
In short, the contractor license bond is designed to protect local authorities, as well as the general public, against fraud or negligence on part of contractors. If a contractor doesn’t adhere to the terms of the contract or all applicable building codes, they can face a bond claim. All valid claims must be paid by the contractor in full. For each claim, the surety will have a deadline within which it must provide the compensation if you fail to do so. However, the ultimate responsibility lies with you, so you will later have to reimburse the surety.
The FAQ section below contains more specific information about these bonds. If you prefer to apply for your bond now, simply start our online application. If you still have questions, don’t hesitate to call us at (877)-514-5146.
Questions about Contractor License Bonds in North Carolina
Who is required to obtain a contractor license bond in North Carolina?
The city of Greensboro requires the following contractors to get bonded:
- Air Conditioning
The Winston-Salem bonding requirement applies to the following contractors:
- Street, Bridge and Sidewalk
Electrical contractors in North Carolina, regardless of the location, will have to post a surety bond known as a Statement of Bonding Ability.
Landscape contractors are also subject to a statewide bonding requirement, known as а Landscape Contractors’ Licensing Surety Compliance Bond.
Finally, a contractor bond may be required for work on public streets.
How much does a NC contractor license bond cost?
The total value of the bond is different for each bond. In the table below we outline total bond amounts for all types of bonds and locations, as well as an estimate on your expected cost based on your credit score. Your bond cost, or “premium,” will be a small percentage of the bond amount.
|Location||License Type||Surety Bond Amount||Credit Sore|
|Above 700||Between 650-699||Between 600-649||Below 599|
|Greensboro||Electrical, Plumbing, Heating, Air Conditioning, Mechanical, Refrigeration, HVAC and Concrete||$2,000||$100||$100||$100||$100-$200|
|Demolition, Grading and House Moving||$5,000||$100||$100-$125||$125-$250||$250-$500|
|Winston-Salem||Street, Bridge, and Sidewalk||$20,000||$188-$375||$250-$750||$625-$1,250||$1,250-$2,500|
|Heating and Electrical||$2,500||$100||$100||$100-$125||$125-$250|
|Statewide||Statement of Bonding Ability for Intermediate Electrical Contractor||$50,000||$375-$750||$500-$1,250||$1,250-$2,500||$2,500-$5,000|
|Statement of Bonding Ability for Unlimited Electrical Contractor||$130,000||$975-$1,950||$1,300-$3,250||$3,250-$6,500||$6,500-$13,000|
These amounts are just estimates based on your credit score, because it’s the most important factor that surety bonds company take into consideration. However, the financial strength of your business, your personal finances, and even your business’s age can also be contributing factors.
Learn more about these factors on our 'What Does a Surety Bond Cost?' Page.
Contractors with Insufficient Working Capital
The North Carolina Contractors License Board may require license applicants with insufficient working capital or net worth to post a surety bond, especially for work on larger projects. The amount depends on their license type:
- $350,000 for a limited license
- $1,000,000 for an intermediate license
- $2,000,000 for an unlimited license
Can I get bonded with bad credit?
Obtaining a contractors license bond in North Carolina is possible for most applicants with bad credit. Since surety bonds companies assume risk when underwriting your bond, they want to offset that risk partially by asking for a higher premium.
Thus, your premium could be as high as 10%-15%, but you will still be able to get bonded. Some circumstances under which an applicant will not be able to get bonded include late child support payments or open bankruptcies.
Find out more on our Bad Credit Surety Bonds page.
What is the application process like?
Applying for you surety bond is an easy and straightforward process with our online application. It takes just a few steps:
- Fill out the application
- Get a free bond quote from our experts
- Pay for your bond
You will receive your bond in the mail but you can also request digital copies via fax or email.
You will need to renew your contractors license and bond each year in order to remain in compliance.
What happens if there’s a claim?
If you violate the terms of the bond agreement, you will have to compensate all parties who suffer losses as a result. The sum of the claim cannot exceed your total bond amount, but you should avoid bond claims not just for financial reasons.
Bond claims can be a long process, which hurts the reputation of your company. Many bonding companies will reject an applicant if they have had claims in the past.
Still Have Questions? Check Our FAQ Pages
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