What Is a Virginia Contractor License Bond?
Virginia contractors often have to get a contractor license bond to comply with the requirements of city and municipality authorities. In Virginia, a contractor license bond is not required at the statewide level.
The purpose of the Virginia contractor license bond is to guarantee the legal compliance of contractors. It protects their customers from any potential misuse or fraud. Your contracting business can face a claim if you transgress the applicable rules.
The contractor license bond is a three-party contract, just like most other surety bonds. Your contracting company that needs the bond is the principal. The obligee is the municipal or city authority that sets the bond requirement. The surety is the entity that provides the bonding.
Questions about Contractor License Bonds in Virginia
Who needs to obtain a Virginia contractor license bond?
There is no statewide requirement to get bonded when you obtain your license from the Virginia Department of Professional and Occupational Regulation.
However, a Virginia contractor license bond may be needed to meet your city or county requirements. Prince William County and Fairfax County, as well as Falls Church, Chesapeake, and Roanoke cities will ask you to get a bond.
As of July 2017, the Virginia Board for Contractors has a new bonding requirement for Class A and Class B contractors.
How much does a Virginia contractor license bond cost?
Your bond price is dependent on the bond amount required by the relevant licensing bodies. In Virginia, most contractor bonds are between $1,000 and $10,000.
To get bonded, you will need to cover only a percentage of the bond amount. This percentage is called the bond premium. If your finances are stable, you can expect a bond rate in the range of 1% and 5% of the required amount. If you have to get a $10,000 bond, this can mean a bond price between $100 and $500.
Besides the bond amount you need to obtain, your bond cost is affected by your personal and business finances. Your surety needs to examine your personal credit score, company finances, and assets and liquidity. This way, it can assess how risky it is to get you bonded. If you are seen as a solid applicant, you will get a lower bond premium.
Our surety bond cost page is an excellent resource for more information about the formulation of bond prices.
|Location and Bond Type||Surety Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Falls Church - electrical, plumbing, mechanical, gas fitter and tree contractor bond||$1,000||$100||$100||$100||$100|
|Falls Church and Fairfax County (projects below $1,000) home improvement contractor bond||$5,000||$100||$100-$150||$150-$250||$250-$500|
|Prince William County home improvement bond, Fairfax County (projects above $1,000) home improvement contractor bond||$10,000||$100-$150||$100-$300||$250-$500||$500-$1,000|
Can I get a bond with bad credit?
It’s absolutely possible to obtain the bond you need even if your finances are problematic. Lance Surety Bonds offers a Bad Credit Surety Bonds program for these exact cases. Our program is here to help contractors with financial issues, such as low credit scores, tax liens, bankruptcies, or civil judgements.
The bonding risk with bad credit applicants is higher. That’s why the premiums are slightly increased: in the range of 5%-10%. We foster close connections with a number of A-rated, T-listed surety companies, so we can still shop around for the best matching bonding option for you.
How do I apply for a Virginia contractor license bond?
Want to get a jump start on your bonding? Apply online to get your free Virginia contractor license bond quote today. We can also get your exact bond quote in no time, after you submit your complete application.
If you need in-depth information about the bonding process, don’t forget to consult our How to Get Bonded page.
We are here to help if you have any further questions. Just call us at (877) 514-5146 to get assistance with your application.
What happens in case of a claim?
The goal of your Virginia contractor license bond is to protect your customers from any potential fraud or non-delivery of contractual obligations, and to protect the local and state bodies in case you don’t comply with applicable laws.
A bond claim can be made on your bond in case you fail to complete your duties under the law. A harmed party can get a reimbursement up to the penal sum of your bond. While your surety will pay the costs at first, you have to compensate it afterwards. This means that claims are to be avoided as much as possible. They can cause serious financial damage to your business, and can prevent you from getting bonded in the future.
How do I get a Virginia contractors license?
Virginia construction contractors have to get licensed with the Virginia Department of Professional and Occupational Regulation (DPOR). You can choose among three classifications of licenses: A, B and C. Learn all the details about the process in the Department’s Step-by-Step Guide. As noted, a bond is not required for state-level licensing.
Depending on your location, you may also need to obtain a county or city license. Among the different criteria, some local authorities will ask you to get bonded too.