Contractor License Bond
Contractor License bonds are usually a third-party agreement between a surety, the contractor and the Obligee. The Contractors License Bond is different from most other surety bonds. The Contractor License Bond is executed by a surety in favor of the state that the contractor is licensed to do business.
Before an active contractors license can be issued or renewed, or an inactive license made active, the licensee must have a current Contractors License Bond or an approved alternative to the Contractor License Bond on file. The Contractors License Bond shall be an amount designated by each state and must follow state specific requirements for all classifications.
A contractor has an obligation not to commit any violation of contractor license law that is ground for disciplinary action against the license. If the contractor does not comply with the conditions of the Contractor License Bond, a claim can be filed with the surety company.
A Contractor License Bond is required from all active licensees. Consumers can file a claim against the bond for violations of the contractors license law by a licensee.
Consumers must file a Contractor License Bond claim with the surety company that executed the bond within a specific time frame. The surety companies will investigate any claim filed against a Contractor License Bond.
A Contractor License Bond may be cancelled within a specific time frame depending upon the language of the state required Contractor License Bond and the date that the state receives a cancellation notice from a Contractor License Bond surety company. If the Contractor License Bond is not reinstated or renewed before the cancellation date the contractors license can be suspended.
Home Improvement and Contractor Bond / Contractors License Bond
If you are planning on home improvement, you will want to protect yourself against fraudulent contractors. It sometimes happens that you sign on for a certain price and end up paying way too much what was quoted or maybe the job wasn’t completed properly. How do you protect yourself?
Look around for a home improvement company with a contractor bond. How would this protect you? It ensures that the person you hire complies with the local laws pertaining to the job on hand. It also means that the person you hire has technical training and expertise in his or her field. Only then will bond insurance companies be willing to stand as guarantee for the individual or company in question.
So what happens when your contractor over shoots the budget or has not provided you with the quality services you were assured of? The insurance company he or she bought the contractor surety bond in Texas from, will compensate you your loss. The loss will be recovered from principal, as per the terms of agreement of the bond.
Contractor License Bonds / Contractors Bonds guarantee that the contractor will comply with all national state licensing regulations and comply within the state statutes that have been set forth in the bond form. The Contractor License Bond / Contractors Bond is one of the most common types of Surety Bonds. This license and permit bond is for a contractor to obtain their license within the specific state they will be transacting their day to day business operations, not to be confused with a Performance & Payment Bond.
The Contractor License Bonds / Contractors Bonds dollar amount varies from state to state. Please check with your state local contractor’s board for the correct bond amount and the Contractor License Bond / Contractors Bond form since every state has a different state requirement.
We have a wide range of surety markets that can write Contractor License Bond / Contractors Bond at preferred rates as long as the contractor can meet the surety company’s requirements. We also have several Surety markets that will entertain Contractor License Bonds / Contractors Bonds even if the contractor has less than stellar credit, Bad Credit, Bruised Credit, Poor Credit, Bankruptcy, Judgments, past due or lack of business financials or negative business equity.