What is a Contractor License Bond?
Contractor license bonds are a type of surety bond purchased by various contractors. They serve to ensure ethical business practice as well as compliance when it comes to building codes as well as other rules and regulations established by various government agencies.
This type of bond is commonly required as part of a license or permit commonly granted by the local city, county, state, or even federal government. Bonding, along with insurance coverage, is how construction company contractors ensure that they protect their customers.
Almost every state in the country requires specific contractors to post these bonds in order to obtain permits and licenses. This is true for both commercial and residential contractors in various construction trades including:
- Home Improvement
- Roofing, and more.
Contractor license bonds are often required on both the state and the local municipal levels. In addition, cities and counties may require additional permit bonds when it comes to sewer work or roadwork.