How much does a Washington contractors license bond cost?
Specialty contractors need to provide a $6,000 contractor license bond, while general contractors need a $12,000 bond. The total amount required for electrical and telecommunications contractors is $4,000. These amounts refer to the maximum penalty sum of the bond. In other words, if a claim is filed against the contractor, it cannot exceed the total amount of the bond.
The actual cost of the Washington contractors license bond is an annual premium, comprising a small percentage of the total amount. If you are a general contractor posting a $12,000 surety bond and you receive a 1% quote, your annual costs will amount to $120.
What your exact quote is going to be depends on the surety bonds company that issues your bond. The most important factor in consideration is your personal credit score, or– in the case of multiple owners– those of each owner. A good credit score is considered to be a FICO of 700 or more. Applicants with good credit can expect a premium between 1%-2%.
|State and Bond Name||Surety Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
Our surety bond cost guide contains some more information on the topic, including valuable cost-saving tips.
Other types of contractor license bonds in Washington
Some other types of Washington contractors are also required to post a surety bond. These include right-of-way contractors, fire sprinkler system contractors, side sewer contractors, and structural pest inspectors, but their required total amounts are not fixed. They depend on the location. If you need one of these bonds, contact your local authority and ask about the total amount required before you apply.
Options for applicants with bad credit
Some of the contractors license bonds in Washington require a credit check while others don’t. A credit check doesn’t mean that you can’t get bonded if you have bad credit. It just means that you may have to pay a higher premium.
We operate a Bad Credit Program which allows us to provide the lowest possible rates. Bad credit applicants are usually quoted at a 3%-5% rate.
What is the purpose of this bond?
Like other types of contractor license bonds, these required in Washington are designed to both protect the public and the state. They represent a three-party agreement between the state, the contractor and the surety bonds company. If a violation of the agreement is established, a claim can be made against the bond, which means the surety offers compensation to the claimant. Afterwards, however, it’s the contractor's responsibility to reimburse the surety.
What constitutes a violation of the bond agreement depends on the type of license you hold. Let’s take a look at some examples.
General and Specialty Contractors
As per the term of their contractor bond, general and specialty contractors are required to:
- Pay all due wages and fringe benefits to their employees or subcontractors
- Be in compliance with RCW 18.27.040 of the Contractor’s Registration Act
- Pay taxes to the state
- Adhere to all contracts they enter
General contractors are allowed to perform an unlimited number of trades or crafts, while specialty contractors are limited to just one, such as plumbing, roofing, HVAC, fire protection, handyman services, etc.
Electrical and Telecommunications Contractors
The conditions for electrical and telecommunications contractors are roughly the same as those for everyone else. The difference here is that the applicable section for them is RCW 19.28.010(3).
How to apply for a Washington contractor license?
To complete your contractor licensing application, you need to take a few extra steps in addition to obtaining a contractor license bond. Some of them include:
- Register with the Washington Secretary of State (valid for LPs, LLCs, LLPs and corporations)
- Pay the $113.40 fee - valid for 2 years
- Obtain a Uniform Business Identifier (UBI) number
- Get a IRS Employer ID
- Buy $250,000 general liability insurance
- Fill out and notarize an Application for Contractor Registration
The Washington State Department of Labor and Industries has local representatives whom you can contact, to verify if you have satisfied all pre-licensing requirements.
Keep in mind that only original bond and insurance forms are accepted, but if you apply with us, we can provide digital copies via fax or email. Furthermore, you need to send the bond form within 30 days of the date it’s signed and issued by the surety bonds company.
Have any more questions about your Washington contractors license bond? Call us at (866)-450-3412 and we’ll be happy to help!