A Contractor License Bond is a surety bond that is sometimes required by state, county, city and other governing agencies. The bond is typically a requirement for individuals seeking to become a licensed contractor. Contractor License Bond amounts vary from state to state. The bond amounts typically range from $1,000 up to $50,000 although higher bond amounts are required sometimes.
The Contractor License Bond, when put in place, serves to protect the public. The bond provides a form of guarantee that the contractor will conduct business in a manner adherent to the laws and rules of the governing body requiring the bond. If a contractor violates these laws/rules, a claim can be made against the bond. The Surety, the entity that provides the guarantee behind the bond, will now have to either pay a sum, up to the bond amount, to cover the claim or make arrangements to settle the claim in some other fashion.
When the Surety has to pay out on a surety bond claim, the financial sum required to fulfill the Surety's responsibility on the bond is now owed the Surety by the contractor. The contractor is ultimately financially responsible for any amount paid out on a claim by the Surety.
Rates for Contractor License Bonds vary widely. The rates are determined based on various factors which include credit standing and may include financial standing as well. Typically, the poorer the credit, the higher the quotes are for Contractor License Bonds.
The best way to get a truly accurate quote for a Bond is to apply for the bond and let the underwriter review the request and put a quote together.
Viking Bond Service, Inc. will always attempt to get the best rate for any surety bond request. In instances where the rate is high to start due to challenged credit, our renewal department can remarket the bond if there has been an improvement in credit and/or financial standing.
A Performance Bond may be required to bid for, or accept a contracted job. Learn about Performance Bonds here.
A Medicare Bond is required of some durable medical equipment suppliers who accept Medicare payments. Learn more and get a quote here.
Learn about the bonding process. Viking will guide you step by step from application to bond in hand.
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