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Montana Contractor's License Bond

Contractors can find work across Montana, but first they will need a license. Anyone performing contracting services must be licensed by the Montana Department of Labor & Industry. That raises an important question, "Do you need a Montana contractor's license bond to get a state license?" We will answer that question and cover all things related to surety bonds and Montana contractors on this page.

Who Needs a Montana Contractor's License Bond?

Montana does not require most contractors to get a surety bond as a requirement for getting a license. Therefore, Montana contractor's license bonds are not a concern for the vast majority of people in the industry, although getting a license is required. There are a few exceptions, however. Prepare to get a Montana contractor's license bond If you plan to work in any of the following roles:

  • Water well contractor
  • Gas fitter contractor
  • Sidewalk, curb, and pavement contractor
  • Excavation contractor

Surety bond requirements for the last three entries on that list only apply to contractors working in Missoula. Elsewhere in Montana, they don't need bonds, but the requirement on water well contractors applies statewide.

How Does a Montana Contractor's License Bond Work?

This particular bond, like all other surety bond types, makes the bondholder (called the principal) financially liable for misconduct that causes damage to the other party in the bond agreement (called the obligee). The damaged party may file a claim against the bond and, provided that the claim holds up under investigation, receive a guaranteed settlement from the company that issues and backs the bond (called the surety).

The final part of the process involves the principal – the contractor who caused the claim – repaying the surety the full settlement amount plus interest and fees. As the party with legal responsibility for claims, the principal must always repay the surety or have the debt enter collections.

How to Get a Contractor's License in Montana

Obtaining a Montana contractor's license bond works like this:

  1. Find a trustworthy surety agency to work with.
  2. Submit a bond application and undergo a credit check.
  3. Receive a quote for the bond premium.
  4. Pay the premium to activate bond coverage for 12 months.
  5. Get documentation proving the license bond requirement has been met.

How Much Will a Montana Contractor's License Bond Cost?

The surety bond cost will be a small percentage of the total bond size – e.g. the maximum amount the surety agrees to pay in settlements. The exact percentage depends on the bond seeker's credit score and financial history. Stellar credit leads to lower bond costs. Bad credit comes with higher costs, but thanks to the bad credit surety bond program from Viking Bond Service, even people with credit issues can get approved for bonds at fair rates.

Do Montana Contractor License Bonds Require Renewal?

Contractor license bonds expire after 12 months. The surety agency will reach out before that point to start the renewal process. Failure to renew a bond leads to a lapse in bond coverage, thereby invalidating the contractor license and rendering all future work illegal.

Therefore, it's important to renew bonds faithfully. Renewal works much like the original application. The surety agency will evaluate credit, then quote a bond price accordingly. That means the bond renewal cost could be higher or lower than before depending on changes to credit.

Are There Other Kinds of Montana Contractor Bonds?

Even though Montana contractors don't need a surety bond to get a license, they will likely need surety bonds to win contracts. Contractor bonds, which encompass many different types of surety bonds relevant to contractors, make the bondholder liable for any breach of contract. If a contractor does not complete a job on time, pay everyone involved, meet quality standards, or otherwise meet every standard outlined in a contract, contractor bonds hold them liable. Contracts in the construction industry, especially on larger-scale projects, often require contractors to obtain various contractor bonds before finalizing the agreement. That's why every Montana contractor should have a trusted bond partner for when bond requirements inevitably arise.

Viking Bond Service – Serving All of Montana

If you're a Montana contractor who needs a surety bond – any kind, any size, any reason – you can rely on Viking Bond Service to make everything easy. We take the hassle out of bonding so that contractors can meet their bonding requirements whenever they arise. Request a quote at any time – we provide most quotes within 24 hours. Or talk to our team about all your bonding questions contact us or call 1-888-2-SURETY (1-888-278-7389).

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