Overview of Michigan Contractor Bonding Requirements
Michigan is one of the states with few surety bond requirements for contractors. Currently, only St. Clair and Oakland County require a bond when granting licenses to contractors.
The purpose of these bonds is to protect the public, by making sure that contractors declare and pay their taxes on time and that they perform construction work which adheres to local building codes. Contractor license bonds are also designed to protect owners entering in contracts with bonded contractors. This is why, despite being an extra cost for contractors, surety bonds are often used by contractors as a way to advertise their services as safe and reliable.
Michigan Contractor License Bond Cost
To get a quick estimate of your bond cost, you can use our free calculator on the right. You need to know the total amount of your bond and your credit score. The full amounts for these bonds is not fixed, so you need to contact the relevant authorities at St. Clair or Oakland County to find out your required amount.
This amount is the maximum compensation you may owe to a claimant in case you break the terms of the surety bond agreement– but it’s not the amount you need to pay upfront. To get bonded you only pay an annual premium, which can be as low as 0.75% if you have impeccable credit.
Contractors with lower credit pay higher premiums, because of the higher risk involved for sureties. However, if you can demonstrate industry experience, or strong financials, or if your business has been in operation for many years, you will usually get a lower premium despite your credit score.
Information about St. Clair Contractors
The total amount for St. Clair contractors is $1,000, if you work on premises of 10,000 sq. ft. or less. Working on larger areas means that for every additional 10,000 sq. ft. your bond amount will double. For example, a contractor working on a 20,000 sq. ft. project will need to furnish a $2,000 surety bond.
The bond guarantees the quality of the work for up to five years. The only exception to this rule and the square feet rule are curb cutter contractors.
Our Bad Credit Program
Our Bad Credit Program is designed for applicants with a lower credit score in mind. In almost all cases, you can apply with us and successfully get bonded.
You should keep in mind that not only your credit score, but the information in your credit report also plays a role in determining your premium. Applicants with no credit history are also considered high-risk.
Although premiums can go as high 10%, you can still get bonded and work on improving your application with the help of our agents.
Apply for Your Michigan Contractor Bond!
You can now start your application. We have the necessary bond forms, so you can just submit our one-page online application and our knowledgeable agents will take you through the rest.
Your bond will be ready in just one or two business days!
Getting a Michigan Contractor License
To get licensed as a contractor in Michigan, you first need to choose a contractor classification: Individual Residential Builder or Individual Maintenance & Alteration Contractor. Next, check with the Department of Licensing and Regulatory Affairs to make sure you are eligible.
You must complete 60 hours of pre-licensing education, after which you can apply through the Department’s online portal. You will then need to submit some additional documentation, be of good moral character, and successfully pass an examination.