New Mexico Contractor License Bonds
Every licensed contractor in New Mexico is required to carry a surety bond of $10,000. The New Mexico contractor's license bond is mandated in Statute 60-13-12 and required of all contractors who do more than $7,200 in total work in a given year.
How Does Contractor License Bond In New Mexico Work?
A New Mexico contractor's license bond protects the state and the customer from fraud or unsafe practices by contractors. Contractor surety bonds guarantee that a bonded contractor will follow all state and local laws and regulations. The bond creates both a financial incentive for the contractor to follow the law and a recourse mechanism for any damaged party.
If someone alleges a contractor failed to complete the contract or did so in an unsafe or illegal manner, they may file a claim against the New Mexico bond. The surety company that underwrites the bond launches a thorough investigation. If the surety finds the claim is baseless, they dismiss the complaint. If they find the contractor was at fault, the surety pays the claim up to the bond's full value. Then, the surety seeks repayment from the bonded contractor.
New Mexico Contractor License Bond Requirements
In New Mexico, all general contractors doing more than $7,200 annually must carry a $10,000 bond. Additionally, contractors who perform the following must also obtain New Mexico contractor license bonds:
- Excavating
- Air conditioning or heating
- Electrical work
- Building structural work
- Plumbing projects
- Mechanical work
- Specialty contractors
How to Get a Contractor License Bond in New Mexico?
Viking Bond Service streamlines obtaining a surety bond like a New Mexico contractor license bond into three simple steps:
- Complete our online bond application.
- We run a credit check.
- We may request supplemental documents.
Next, we will send you a competitive quote ASAP. Once you pay the premium, we'll send you the bonding verification so you can get to work.
The Cost of Contractor License Bond in New Mexico
A surety bond's cost is a small fraction of the bond's value, typically between 1-5% per year. The contractor's credit determines the premium on a New Mexico contractor license bond. With sterling credit, the bond is 1% of $10,000 or $100. The weaker the credit score, the higher the premium, but we work with you to help you get bonded as affordably as possible.
Why Are Contractors Required to Be Bonded in New Mexico?
Contractor work routinely involves enormous sums of money while creating significant safety hazards. Further, the results must stand for years without hidden weaknesses causing future damage. New Mexico contractor's license bonds protect investors, the state, and the public from fraudulent or unsafe practices on the part of contractors.
How Long Does a Contractor License Bond in New Mexico Last?
A New Mexico contractor license bond is valid for three years, at which point it must be renewed. If your credit rating improves during the life of the bond, your premium may be lowered for the renewal.
Get Your New Mexico Contractor License Bond Quote Today
Viking Bond Service is your partner for any type of surety bond. Request a quote online or give us a call at 1-888-2-SURETY (1-888-278-7389). We look forward to assisting you.
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