Arkansas Contractor License Bond
Your first step to start a career as an Arkansas contractor is to obtain a license. The Arkansas Contractor License Board issues several kinds of licenses depending on what kind of contractor you intend to become – eg. home remodeler, commercial contractor, etc. Working without a license comes with expensive penalties, so it's essential to obtain a license before starting any work. One license requirement you will need to meet is getting an Arkansas contractor license bond. The team at Viking Bond Service has covered the basics below.
How Does a Contractors Bond in Arkansas Work?
One of many surety bond types, a contractor license bond holds a licensed contractor financially accountable if he/she breaks state laws and codes of conduct relevant to the building industry. There are three parties involved:
- Principal –The contractor who obtains the surety bond and pays for any claims filed against the bond by the obligee.
- Obligee – The party that hires the principal. The obligee may file claims against the bond for damages caused by the principal.
- Surety – The entity that issues and backs the bond. The surety guarantees a settlement to the obligee, but the principal must repay that debt with interest and fees added.
Why Are Contractors Required to Be Bonded in Arkansas?
The contractor's license bond is a requirement in Arkansas and most other states because bonds are an effective way to regulate industries and enforce rules. Since the bond agreement holds the contractor accountable for misconduct, the contractor has a personal financial incentive to follow state laws. In the event that they don't follow those laws, the Arkansas contractor license bond makes it easy for anyone damaged by the contractor to pursue and receive compensation.
Even though these bonds are a requirement, they are also an asset for contractors. That's because a contractor who is licensed and bonded appears to potential customers like someone who is legitimate, trustworthy, and willing to be held accountable. In the end, surety bonds are good for business.
Arkansas Contractor License Bond Requirements
You will need to get a surety bond valued at $10,000 to meet the license requirement. The valuation refers to the total amount the surety will pay to settle claims. All contractors statewide will need to get this bond, but some may face additional surety bond requirements depending on their location. The municipalities of Benton, Fort Smith, Greenbrier, Little Rock, Jacksonville, North Little Rock, Pine Bluff, Sherwood, and Star City require additional contractor license bonds. For help determining which bonds you need, rely on the team at Viking Bond Service.
How to Get a Contractor License Bond in Arkansas
Getting a surety bond sounds like an intimidating process, but it's much simpler than it seems. Follow these steps:
- Find a surety agency that issues the required bond.
- Complete a standard bond application.
- Let the surety agency run a credit check.
- Provide additional documents, if and when necessary.
- Get a quote for the bond cost (called the premium).
- Pay the premium to activate bond coverage.
- Receive a document to provide the licensing board.
The Cost of a Contractor License Bond in Arkansas
Bond costs are a fraction of the total bond value, which is $10,000 in this case. The exact cost depends on the bond seeker's credit score and financial history. People with stellar credit will have the lowest bond costs. However, the lower the credit standing the higher the bond cost, and some surety agencies will deny people a bond because of their bad credit. That's why Viking Bond Service offers a bad credit surety bond program to help more people get approved for bonds, regardless of credit, and still pay fair rates.
How Long Does a Contractor License Bond in Arkansas Last?
Bond coverage lasts for 12 months. If coverage is not renewed, it lapses after the expiration date, which violates the terms of the license agreement and makes any future contracting work illegal. Getting a bond is just the first step. Keeping it active and in good standing will be the priority after that. Renewing the bond involves a new credit check. Based on any credit changes, the renewal premium for the bond will be less or more than it was before.
Viking Bond Service - Serving Arkansas Contractors
Bonding should not be an obstacle to getting an Arkansas contractor's license. That's the philosophy we take at Viking Bond Service. We strive to make bonding easy, affordable, and stress-free for everyone we serve, which includes many contractors across Arkansas. Not only can we help you get contractor license bonds, but we can also help you get all the other bonds that contractors need as part of their job.
Your first step is to request a quote – expect a response within about 24 hours. You can also get more information before moving forward with anything. Please call us at 1-888-2-SURETY (1-888-278-7389) or contact us.
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Viking's contract surety bond agents are registered with the SBA and can provide access to the Surety Bond Guarantee program.
