Contractor License Bonds
When starting your contracting business, your state or municipality may require you to get a license. The licensing process may then require you to have a bond. Brunswick Companies bond professionals have the knowledge and experience to help you get the bond you need to meet your state's requirements.
What is a Contractor License Bond?
Contractor license bonds guarantee that you will operate your business in compliance with the rules and regulations associated with your specific contractor’s license. These bonds exist to protect the public from fraudulent practices and unscrupulous contractors.
How do Contractor License Bonds work?
Contractor license bonds benefit the state or municipality regulating the contractor industry in two ways.
First, by requiring all contractors to be bonded, the government entity places additional scrutiny on the contractor to ensure they’re qualified and a good risk. The surety will assess the contractor by examining the credit and financial standing of both the company and the owners.
Second, if the contractor violates the terms of the bond, resulting in a financial loss, the state or municipality can make a claim against the bond that the surety must address. Once the surety determines the validity of the claim, they will pay the government entity up to the amount of the bond. The surety will then seek reimbursement for any money paid from the contractor.
How much do Contractor License Bonds cost?
The state of municipality requiring the bond determines the bond amount, but the cost will be a percentage of that amount. While the cost may range anywhere from 1.5% to 15% of the total amount, the final rate depends on your credit and financial standing — the better your credit is, the lower your rate will be.
Having bad credit doesn’t mean you can’t get a contractor license bond. Brunswick Companies has a large network of sureties and we’re able to get the best price for you, even if you have bad credit. While the rate will be higher — usually in the range of 5% to 15% — you can still become bonded.
Types of Contractor License Bonds
Depending on which state or municipality you live in, you may need one of these types of contractor license bonds to do business in your field. Some of the most common are:
Brunswick Companies has surety professionals who can help you get these bonds and more when you get a free quote today.
How do you get a Contractor License Bond?
The process to getting a contractor license bond begins with requesting a quote. From there, our surety professionals will work with you to complete the required application for your state or municipality. Our surety professionals will check your credit and may request additional financial information for your company and any other owners. Once you’re approved, and after signing the indemnity agreement, our surety professionals will send your bond to you and file it with the appropriate state or municipal department.