Ohio Contractor Bonding Requirements
There is no surety bond requirement that applies to all contractors in Ohio, but many cities and counties have varying requirements of their own.
The exact purpose of each of these bonds may vary slightly. Generally speaking, they ensure that the work contractors perform is in compliance with all applicable state, local or federal rules. They also protect the contractors’ clients in cases where they suffer loss or damage as a result of contractor negligence, fraud, etc.
Contractors should be well aware of the responsibility that comes with being the principal of a surety bond, since failure to comply with all of its terms can lead to a claim.
To find out more specific information on bonding requirements for Ohio contractors, you can explore the Q&A sections below. Or, feel free to contact us by phone at (877)-514-5146.
Frequently Asked Questions
Where do Ohio contractors need to get bonded?
As we mentioned in the beginning, the list of cities and counties which require a bond is quite extensive.
Currently, the following locations require bonds: Aurora, Bedford Heights, Brecksville, Canton, Chillicothe, Cleveland, Cleveland Heights, Columbus, Eastlake, Euclid, Findlay, Gahanna, Garfield Heights, Grove City, Hartville, Highland Hills, Hocking County, Huron County, Lancaster, Lyndhurst, Macedonia, Mahoning County, Mansfield, Maple Heights, Massillon, Maumee, Medina County, Mentor, Middleburg Heights, Middletown, Moreland Hills, Morrow County, Niles, North Canton, North Ridgeville, North Royalton, Northfield, Oakwood Village, Olmsted Township, Painesville, Perrysburg, Pickerington, Portage County, Portsmouth, Ravenna, Reminderville, Reynoldsburg, Rocky River, Rossford, Sandusky, Seven Hills, Sidney-Shelby County, Solon, South Bloomfield, South Euclid, South Russel, Springfield, St. Mary’s, Streetsboro, Strongsville, Summit County, Tiffin, Toledo, Trotwood, Trumball County, Turnpike Commission, Twinsburg, University Heights, Upper Arlington, Walton Hills, Warren, Warren County, Warrensville Heights, Wellington, Westlake, Whitehall, Wickliffe, Willoughby, Willowick, Youngstown, Zanesville.
What’s the cost of getting bonded as an Ohio contractor?
How much getting bonded will cost you depends on several factors. Each bond has a total amount (called a penal sum). In Ohio they often range between $5,000 and $25,000, though in some locations they are not fixed and are decided on a case-by-case basis. This amount refers to the maximum protection provided to claimants by the bond.
Contractors pay annual premiums based on these total amounts, which are normally between 1% and 3% for applicants with good credit. Those with a low credit score, or past-due items in their reports, can see their premium go as high as 10%. This is a quick way to estimate your costs just by knowing your total amount and personal credit score.
Keep in mind, however, that the underwriting process can consider other factors as well, such as the age of your business, your industry experience, and your financial strength among other things. Our “What Does a Surety Bond Cost?” page contains more information about surety bond rates.
What is the application process like for bad credit applicants?
We have a bad credit surety bonds program for applicants with bad credit, no credit, or credit report issues. Through it, 99% of applicants successfully get bonded, without having to post collateral or look for a co-signer.
While you will have to pay a higher premium, your bad credit will usually not prevent you from getting your contractor license bond. Two exceptions worth mentioning are applicants with open bankruptcies, or who are late on their child support payments.
How do I apply to get bonded?
The application process is simple and straightforward. You start by submitting a quick online application that includes a few details about your business, such as ownership information.
Afterwards, we’ll contact you as soon as possible and give you a free no-obligations quote. We have all the bond forms with us, so you don’t have to worry– we do almost all of the paperwork for you. For any questions, you can reach us at (877)-514-5146.
How do I get an Ohio contractor license?
A state license is required from contractors who do electrical, plumbing, HVAC, hydronics and refrigeration work. Licenses are handled by the Ohio Construction Industry Examining Board. You must be at least 18 years of age, have never been convicted of a felony and have a minimum of five years of experience.
Other license types are handled on a local level, so you should contact your local licensing authority for information on licensing requirements.
What should I know about claims?
It’s very important to understand the terms of your bond well, so that you don’t accidentally get into a claim with the state or a client. Usually, the bond form will contain some of the provisions you need to comply with so be sure to read it carefully. You should also make sure you understand local building codes in the locations where you perform work.
In case you break the bond terms, you may be notified that there is a claim filed against you. In most cases, you’ll be given a certain amount of time to remedy the situation. If you fail to do so, you’ll be financially liable, and the surety will have to step in to provide timely compensation to the claimant. The ultimate responsibility lies with you, however, and you will still have to reimburse the surety in the end.
This means you should avoid claims, as they can do irreparable damage to your business, and may make it impossible to get bonded again in the future.