Contractor License Bond

Contractor license bonds are different from contract bonds, including performance, payment and bid bonds. It’s a common misconception that the two types of bonds are the same, but it’s important to differentiate between them.

You’ll need a contractor license bond as a part of your licensing process with your local or state authorities. This type of bond is a prerequisite for obtaining the right to operate. It ensures you will act lawfully in your capacity as a licensed contractor.

In contrast, contract bonds are required on a project basis. You may need to get them before bidding on public or private construction projects. They guarantee your performance as a contractor on a specific project.

You may need a different type of contractor license bond depending on the license you want to obtain. The common types include:

• General contractor license bond
• Residential contractor license bond
• HVAC contractor license bond
• Electrical contractor license bond
• Plumbing contractor license bond
• Home improvement contractor license bond
• Roofing contractor license bond
• Landscape contractor license bond
• And others 

The type of contractor license bond you’ll have to post also depends on the authority that requires you to get bonded. This means you may need to get a:

• State contractor license bond
• County or municipality contractor license bond
• City contractor license bond

Ready to start your bonding process? Just fill out our online application form for a free, no-obligations bond quote.

Check the Bond Amount Required

The first thing you’ll need to do is check the bond amount required. The amount will vary depending on the type of surety bond you need, your licensing requirements and your location. If you’re unsure of your bond amount, contact the person or organization that requires you to get bonded (the obligee) to find out more.

Fill in Our Online Application 

Once you know your bond amount, you can get the bonding process started by filling in our online application form. You’ll need to provide information about your business background and personal finances and tell us which bond you require. We’ll then give you a free quote. If you’re happy with your quote, we can complete the process and get you bonded.

The bond amount you have to post is determined by your local or state authorities. Your bond cost is a fraction of this amount.

Your surety sets your contractor license bond cost, known as premium, on the basis of your personal and business finances. The most important factor is your personal credit score. The stronger your profile is, the lower your price would be. It’s very rare that a collateral would be required for this type of bond.

While it’s more difficult to get bonded with bad credit, with Lance Surety Bonds, it’s certainly possible. You can use our Bad Credit Program to obtain the contractor license bond you need.

For a full overview of the bond price formation, you can review our detailed How Much Does a Surety Bond Cost? guide.

If your credit check shows your finances are in good order, and if you have all of your other paperwork and application fee ready to go, you can get bonded within a few days. In some cases, you may even be able to complete the process in a matter of hours.

Unlike contract bonds, construction bonds and performance bonds which are generally valid for the length of set construction projects, contractor license bonds are linked to the duration of your license. So, if your license application has to be renewed every 12 months, your bond will be valid for one year.

If you have more questions about your contractor license bond cost, just call us at (877)-514-5146.

Additional Resources

How to Get Bonded Guide