What Is an Electrical Contractor Bond?
A common requirement for obtaining an electrician license across the U.S. is to post an electrical contractor bond. This is a type of contractor license bond. Its purpose is to ensure that electricians will fulfill all their contractual obligations, and will follow relevant laws. The bond acts as a safety net for customers, and for authorities providing the licensing.
Electrical contractor bonds function similarly to other surety bonds. They represent a contract between three parties. Your electrical contracting business is the principal, the authority that requires you to get bonded is the obligee, and the surety is the third entity which provides the bond’s backing.
Who needs to obtain an electrical contractor bond?
A few states which require an electrical contractor bond include Minnesota, New Jersey, Arizona and Washington. The bond is one of the requirements for obtaining an electrician license or becoming a certified electrician.
Before you set off to obtain your state license, it’s a good idea to check with the relevant authorities about the type and amount of the bond you need. You can find a list of some states’ bond requirements at the end of this page.
Questions about Electrical Contractor Bond
How much does a electrical contractor bond cost?
Your surety bond price is set on the basis of the bonding amount you are required to post during the licensing process. The relevant licensing authorities determine this amount, so before you start your bonding, make sure to check their exact requirements. Check the table below for some referential amounts.
On the basis of the bond amount, you need to pay a bond premium, which is a fraction of it. Usually, this means covering 1%-5% of the required bond.
How is your electrical contractor bond cost determined? When you apply for the bond, your surety has to consider your full financial profile. This includes your personal credit score, business financials, and liquidity and assets. You can expect a lower bond premium if your finances are solid, particularly your credit score.
Make sure to consult our surety bond cost page for a complete review of how the bond price is formulated.
|State and Bond Name||Surety Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Minnesota electrical contractor bond||$25,000||$187-$375||$250-$625||$625-$1,250||$1,250-$2,500|
|NJ electrical contractor bond||$3,000||$100-$125||$100-$175||$150-$200||$150-$300|
|AZ electrical contractor bond||Min. $2,500||$100-$125||$100-$150||$150-$200||$175-$250|
|Washington electrical contractors bond||$4,000||$100-$125||$100-$150||$150-$200||$200-$400|
|North Carolina electrical contractor bond||Min. $50,000||$375-$750||$500-$1,250||$1,250-$2,500||$2,500-$5,000|
Can I get bonded with bad credit?
Lance Surety Bonds runs its Bad Credit Surety Bonds program to help electricians with low credit scores, tax liens, bankruptcies, or civil judgements get bonded.
The typical bad credit bonding premiums are in the range of 5%-10%. The higher cost compensates for the increased bonding risk. With us, however, you’re always guaranteed a top bonding rate. We work with A-rated, T-listed surety companies, so we can shop around for the best bonding option for you
How do I apply for an electrical contractor bond?
You can start your bonding today by applying online for a free electrical contractor bond quote. After submitting your complete paperwork, we’ll also deliver your exact bond quote.
Have more questions? Our How to Get Bonded page is an excellent resource on the bonding process.
For any further queries, just call us at (877) 514-5146 and our bonding specialists will be happy to help.
What happens if there is a claim against my electrical contractor bond?
Unlike insurance, your bond functions as a safety net for authorities issuing your license and for your customers. That’s why it’s important to grasp how the bond claims process works.
If you don’t abide by applicable rules and your commitments under the bond, you can face a claim. Some examples of breaches include not following the statutes governing electrician’s activities in your state, or not executing your contractual commitments with customers.
Proven claims entitle affected parties to compensation, which can be up to the penal sum of the bond. Your surety will cover the costs at first, but you will have to repay it in full. This makes claims a serious financial burden, so it’s best to avoid them as much as possible.
Electrical contractor bond state requirements
Minnesota electrical contractor bond
All licensed electricians in Minnesota need to present an electrical contractor bond to the Minnesota Department of Labor and Industry. The bond amount is set at $25,000. Its purpose is to ensure compliance with Minnesota Statute 326B.33.
New Jersey electrical contractor bond
Electrical contractors in New Jersey need to get licensed with the New Jersey Division of Consumer Affairs’ Board of Examiners of Electrical Contractors. The required bond is $1,000 for a three-year term. The bond guarantees that electricians will comply with the New Jersey Electrical Contractors Licensing Act of 1962.
Arizona electrical contractor bond
Electricians in Arizona need a C11 type of license from the Arizona Registrar of Contractors. Depending on the gross volume of work per license, the bond requirement is between $2,500 and $50,000. The bond ensures compliance with Arizona Revised Statutes Title 32, Chapter 10.
Washington electrical contractors bond
Washington State electricians have to obtain a license from the Department of Labor and Industries. For that purpose, they have to post a $4,000 electrical contractor bond. It guarantees electricians will follow Chapter 296-46B of Washington State Statutes.
North Carolina electrical contractor bond
In North Carolina, electricians have to get licensed with the NC State Board of Examiners of Electrical Contractors. The bond amount is $50,000 for intermediate and $130,000 for unlimited classification. The purpose of the bond is to guarantee compliance with Section .0800 of the state’s regulations.