Contractor
Contractor Bonds – Why?
Sometimes I get calls from contractors asking about contractor bonds. What are they? Who needs them? Is it really necessary to have one? Okay, so here it is in a nutshell. A contractor bond is required by the California partnership or corporation) must show proof of having a contractor bond before a contractor license can be issued. Contractors must also have a bond to retain an active license (renew a license), or reactivate a contractor license.
The minimum contractor bond amount required is $12,500. The bond must be from a legitimate SuretyCompany and have the exact same name and business information as used for the contractor license application so that it matches the name and information on the contractor license. It’s important that the CSLB receives the contractor bond within 90 days of the effective date on the contractor bond.
The rates of contractor bonds will vary depending on if you get a 1-year, 2-year, or 3-year bond. It will also vary in price based upon your credit. The better your credit rating the lower the bond rate. Bad credit will increase the monthly cost of the bond. On average a 2-year bond is approx. $140 – $150 a month with good to fair credit.
If you have other questions about getting a bond or about getting a contractor license feel free to contact me.