How much does the NC contractors license bond cost?
General contractors across North Carolina are not required to get bonded as part of their licensing process, while electrical and landscape contractors do need to obtain a contractor license bond. In addition, the cities of Greensboro and Winston-Salem also require certain applicants to get bonded.
The exact amount of the bond depends on the type of work and the city where contractors will be performing their business. Have a look at the table further below for a more detailed breakdown of bond amounts and bond costs in North Carolina.
Keep in mind that the final cost of your contractors license bond is a small percentage of the full amount of the bond. The final rate depends mostly on your personal financial background and credit score.
A good credit score, for example, can provide you with a rate as low as 0.75%.
On the contrary, bad credit score can raise the percentage up to 3%-10%. The increased rate in this case compensates for the higher risk that goes with applicants coming from a far-from-perfect financial background.
|Location||License Type||Surety Bond Amount||Credit Sore|
|Above 700||Between 650-699||Between 600-649||Below 599|
|Greensboro||Electrical, Plumbing, Heating, Air Conditioning, Mechanical, Refrigeration, HVAC and Concrete||$2,000||$100||$100||$100||$100-$200|
|Demolition, Grading and House Moving||$5,000||$100||$100-$125||$125-$250||$250-$500|
|Winston-Salem||Street, Bridge, and Sidewalk||$20,000||$188-$375||$250-$750||$625-$1,250||$1,250-$2,500|
|Heating and Electrical||$2,500||$100||$100||$100-$125||$125-$250|
|Statewide||Statement of Bonding Ability for Intermediate Electrical Contractor||$50,000||$375-$750||$500-$1,250||$1,250-$2,500||$2,500-$5,000|
|Statement of Bonding Ability for Unlimited Electrical Contractor||$130,000||$975-$1,950||$1,300-$3,250||$3,250-$6,500||$6,500-$13,000|
For a more detailed explanation of your bond cost have a look at our surety bond cost guide.
What are the options for applicants with bad credit?
Surety companies evaluate their applicants’ credit reports in order to offer them specific premium quotes. Having this in mind, a bad credit score can increase the bonding rate to 3%-10%.
Contractors with more unstable financial background, however, still have a chance for good bonding deal with Bryant Surety Bonds. We created our bad credit program for applicants with bad or no credit score. Our experts will help you work around your credit score and still get a top bonding rate.
What is the purpose of this bond?
The North Carolina contractor license bond is an agreement that protects the state, its citizens and their interests. The contractor license bond is essentially a guarantee that the contractors will follow the state and city laws and regulations, regarding their business.
If the conditions presented by the bond are violated by the contractor, a claim can be filed against the bond. In case the claim is valid, initially the surety company compensates financially the claimants for any damages or losses incurred due to the violation of the conditions of the bond by the contractor. Once the surety extends compensation to the claimant, however, it’s up to the contractor to entirely repay the surety for its compensation.
What are the North Carolina contractor license requirements?
Contractors need to select a classification of their future business, choosing between building contractor, residential contractor, highway contractor, public utilities contractor, or specialty contractor.
After choosing their classification, contractors need to appoint to take the relevant exam for the chosen classification. Applicants must also report their financial information and demonstrate financial responsibility, and submit 3 signed and notarized letters proving their qualification.
Posting a contractor license bond is required only for certain contractors. The North Carolina contractor license bond is valid until canceled. In order to cancel the bond, the surety must submit written notice of the future cancellation to the city at least 30 days prior to the termination date.
To find out more about the North Carolina contractors license requirements, give us a call at (866)-450-3412. Our surety experts will be happy to provide you with all the answers you are looking for.