A Contractors License Bond, also known as a Contractors Surety Bond, is a type of surety bond that guarantees a contractor's compliance with state and local laws, regulations, and ordinances. The bond is typically required by state or local governments before a contractor is able to obtain a license to work in the jurisdiction. It is a form of insurance that protects clients and the public from a contractor's failure to perform their contractual obligations.
How Does a Contractors License Bond Work?
The Contractors License Bond is an agreement between the contractor, the state or local government, and the surety. The bond guarantees that the contractor will comply with the regulations, laws, and ordinances of the jurisdiction in which they are working. If the contractor fails to do so, the surety may be liable for any damages incurred.
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What is the Cost of a Contractors License Bond?
The cost of a Contractors' License Bond varies depending on the type of work being performed, the state or local government's regulations, and the surety's requirements. Generally, the cost of the bond is based on a percentage of the contract price, which is typically between 1% and 3%.
Contractors License Bonds are an important form of insurance that protects clients and the public from a contractor's failure to perform their contractual obligations. They are typically required by state or local governments before a contractor is able to obtain a license to work in the jurisdiction. The cost of the bond is generally based on a percentage of the contract price and varies depending on the type of work being performed, the state or local government's regulations, and the surety's requirements.
