A contractor license bond is a bond most states or cities make you get before they hand you a contractor license. It tells your customers and the state that you will play by the rules.
- Who needs it
- Contractors applying for a state or city license
- Typical bond amount
- $5,000 to $25,000, set by your state
- What you pay
- Starts at $50; larger bonds use industry rate minus 5%
- Term
- One year, renewed with your license
- A claim protects
- Your customers and the state
What is a Contractor License Bond?
A contractor license bond is a promise that you will follow the building laws and finish jobs the right way. If you break the rules and it costs a customer money, that person can file a claim on your bond.
This bond is not insurance for you. It protects your customers and the public. It is one part of getting and keeping your license.
Who needs a Contractor License Bond?
Almost anyone applying for a contractor license needs one. This includes general contractors and many trades like plumbers, electricians, and roofers. Your state or city tells you the exact amount.
You also need to keep the bond active to keep your license. If the bond lapses, your license can be put on hold.
How does a Contractor License Bond work?
The steps are simple:
- Your state or city sets the bond amount. It is often $5,000 to $25,000.
- You buy the bond from Junno Surety for a small yearly fee.
- You file the bond with your license application.
- The state issues your license and you can take jobs.
- If a customer says you broke the rules, they can file a claim against the bond.
If a claim is paid, you repay the bond company. So strong work and clear contracts protect both your customers and you.
How much does a Contractor License Bond cost?
At Junno Surety, small license bonds start at $50. Larger bonds use the normal industry rate minus 5%.
Your exact price depends on the bond amount and your credit. Good credit means a lower rate. We shop our markets to find you the best price.
What happens if someone files a claim?
A claim happens when a customer or the state says you broke a building law or left a job unfinished. The bond company looks at the facts. If the claim is real, they pay the customer up to the bond amount, and then you pay the bond company back.
How to get your Contractor License Bond from Junno Surety
Junno Surety makes this easy. Tell us your trade, your state, and the bond amount on your license form. We can often issue the bond the same day so your license is not held up.
We are a licensed surety bond agency and can often issue your contractor license bond the same day. Start your free quote → or call (762) 499-0237.
Things to know about a Contractor License Bond
Keep your bond active or your license can be put on hold. That is the part many new contractors miss. The bond and the license go together. If the bond lapses, the state may stop you from pulling permits or taking new jobs until you fix it. A few simple steps keep you safe. Mark your renewal date on a calendar. Answer any letters from your state or your bond company right away. Use clear, written contracts with every customer, so there is no confusion about the work. Strong paperwork and on-time renewals keep your license clean and your business moving.
Frequently asked questions
Does the bond protect me or my customer?
It protects your customer and the state. To protect your own business, you would also want general liability insurance.
What bond amount do I need?
Your state or city sets it. Look at your license application, or call us and we will check it for you.
What if I have bad credit?
You can still get bonded. The rate may be a bit higher, but Junno Surety works with many markets to find you a fair price.
Is a contractor license bond the same as insurance?
No. The bond protects your customers and the state if you break the rules. Insurance, like general liability, protects your own business. Most contractors carry both.
What happens if my bond lapses?
Your license can be suspended until you put a new bond in place. We can issue a fresh bond fast to get you back in good standing.