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.

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

The contractor license requirements vary across the U.S. Your state, municipal, or city authorities set the exact criteria you'll have to fulfill to get licensed.

Typically, you’ll need to do the following:

• Get training and hands-on experience in your specialty or trade
• Pass an exam proving your knowledge and skills
• Register a business entity and trade name in the state
• Obtain an Employer Identification Number from the IRS
• Get a general liability and a worker’s compensation insurance policy
• Obtain a surety bond
• Pay the required application and licensing fees

For a full overview of the licensing requirements in your location, check out the drop-down menu below to find your state.