Home / Oregon Contractors License Bond

Oregon Contractors License Bond

A contractor license bond is essential for anyone working as a contractor in Oregon. This type of surety bond is an agreement between the contractor, the state, and the surety, all three concerned parties in any given job. The contractor license bond provides peace of mind for Oregon consumers and helps build trust in licensed contractors for the general public.

The contractor license bond functions as a promise to the state that you as a contractor will follow all applicable laws and regulations along with trade and workmanship standards. Contractor license bonds also show the public that you perform quality work and will actively remedy situations where issues do arise from the work performed. The bond provides consumers with a financial recourse should the bonded contractor not complete the job in an acceptable manner.

What Is a Contractor License Bond and What Does It Cover?

A contractor license bond is a form of guarantee that the contractor will perform his/her job duties properly. Contractors who fail to complete jobs or complete them poorly raise the potential for claims on their contractor license bond. Bond claims have a negative impact on a specific contractor's ability to stay licensed. Claims can lead to bond cancellation. Since the bond is a requirement to maintain licensure, it's best to avoid claims.

While contractor license bonds are required as a consumer protection, the bond also works as an important tool for contractors. Contractor license bonds generate consumer confidence and trust. The bond encourages consumers to hire licensed contractors, knowing that these contractors will complete the job and provide quality work and/or service.

Who are the Parties in an Oregon Contractor License Bond

All surety bond types involve three parties entering into a legally-binding financial agreement. Those three parties are:

• The Principal – The contractor who must obtain a bond that meets the requirements set by the obligee. As the principal, the contractor must take financial responsibility for all valid claims filed against the bond.
• The Obligee – The Oregon Construction Contractors Board, which decides how large the bonds must be. If the principal breaks state laws that apply to contractors, the obligee may file a claim for damages against the surety bond.
• The Surety – The bond company that issues the contractor license bond to the principal and pays for claims filed by the obligee. The surety guarantees payment for valid claims. However, the principal must repay the surety for any settlement with interest and fees added to the debt.

Oregon Contractor License Bond Requirements

The specific requirements will depend on the type of contracting work and the location of the contractor. Oregon has different contractor bond requirements depending on whether someone is a residential or commercial contractor and whether they work in general contracting or certain specialties. There can also be bonding requirements imposed at the county and city level, which come in addition to the statewide requirements. For assistance figuring out bond requirements, contact the team at Viking Bond Service.

How to Get a Contractor License Bond in Oregon

All licensed contractors in Oregon must have an Oregon contractor license bond. The bond can be purchased from a surety bond company licensed through the state. The bonding process typically consists of a general commercial surety bond application, a credit check and payment of premium. The process can take as little as a day to complete.

The Cost of Oregon Contractor License Bonds

Because Oregon contractor license bonds are individually underwritten, the surety bond cost varies from contractor to contractor. When determining the quoted rate, a surety will consider, among other considerations, the bond amount, the contractor's credit and to some extent the contractor's work history. Another consideration is prior claim history. Past claim history can have a significantly negative effect on the bond premium.

The typical price quoted for contractor license bonds in Oregon ranges from 1% to 3% of the bond amount. While most quotes will fall within this range, some do come in both lower and higher than that range based on the details of the application.

Do Oregon Contractor License Bonds Need Renewal?

Bond coverage must remain active and in good standing for an Oregon state contractor license to remain valid. There are penalties for operating without a license, so it's imperative to keep bond coverage at all times.

That will mean renewing the bond on an annual basis. The surety will reevaluate credit at the time of renewal, then adjust the premium price up or down to reflect any changes in credit. Contractors can keep their bond costs low by working to improve their credit.

Oregon Contractor License Bonds by Viking Bond Service

Trust Viking Bond Service to help you secure your Oregon contractor license bond quickly and easily. For more than 15 years, we've been helping our Oregon clients meet their surety bond requirements for a great price. Our experienced team of licensed surety bond specialists will help you get an Oregon contractor bond that won't bust your budget, so get started with an online quote request now.

Request a Contractors License Bond Quote:

Viking Bond Service is here to help contractors across Oregon meet all their bonding needs – starting with a license bond and continuing to whatever other bonds they require. To get a quote for a bond in under 24 hours, request a quote from our team. They are also happy to answer questions about bonding. Call us at 1-888-2-SURETY (1-888-278-7389) or contact us in writing.