Overview of Idaho Contractor License Bond Requirements
Applicants for several different types of contractor licenses across the state of Idaho must post a contractor license bond.
- Applicants for a state HVAC and plumbing contractor license from the Division of Building Safety must post a $2,000 bond when applying.
- In the city of Idaho Falls, applicants for sign company license must post a $1,000 bond, and applicants for a right-of-way license must post a $5,000 bond.
Why do I need a bond?
Contractors are frequently required to post such bonds as a guarantee that they will comply with any state or local laws that regulate their business. If a licensed and bonded contractor violates the conditions of their surety bond agreement this may lead to a claim being filed against the bond.
When a claim is filed, the surety that has issued the bond will determine the amount of compensation that is required and pay it to claimants. Such compensation may be as high as the full amount of the bond. In return, the bonded contractor must then repay the surety.
If you want to know more about the purpose and function of bonds, see our detailed ‘What is a surety bond' guide!
To learn more about the cost of these bonds, how claims occur, and how to apply for your bond, see the sections below!
If you have any further questions about getting bonded, call us at 866.450.3412 anytime!
What's The Cost of a Contractor License Bond in Idaho?
The cost of your bond is a percentage of the full bond amount and it is determined by your surety on the basis of several financial factors.
Financial factors that influence your bond rate
Your personal credit score is the most important factor that determines the cost of your bond. The higher your score is, the cheaper it will be for you to get bonded, and vice versa.
Rates for applicants with very high or good credit scores are usually within the range of 1% to 3% of the bond amount.
Rates for applicants with medium to low scores are in the range of 3% to 5%. These applicants are asked to pay a higher rate because a low credit score is perceived as constituting a higher risk of a claim against the bond. For this reason, sureties ask for additional security when bonding such applicants.
Sureties will frequently also consider the following when trying to determine the appropriate bond rate for an applicant:
- Personal and business financial statements
- Fixed and liquid assets
- Industry experience
To get a sense of what your bond premium might look like, based on credit score, see the table below!
| Idaho Contractor License Bond Cost Based on Credit Score | |||||
|---|---|---|---|---|---|
|
License type |
Bond Amount |
Credit Score | |||
| Above 700 | 650-699 | 600-649 | Below 599 | ||
| State HVAC and plumbing contractor | $2,000 | $100 | $100 | $100 | $100 |
| City of Idaho Falls | |||||
| Sign company | $1,000 | $100 | $100 | $100 | $100 |
| Right-of-way contractor | $5,000 | $100 | $100-$150 | $100-$200 | $150-$250 |
What Can Give Rise to a Bond Claim?
License bonds for contractors are typically conditioned on the faithful performance of a contractor's work in compliance with all applicable laws or regulations. If a contractor violates such laws, causing any losses or damages, a claim may be filed against their bond.
When a claim is filed against a bond, the surety that has issued the bond will investigate the claim to determine its scope and validity. Usually, it will then extend compensation to claimants to cover the losses for a maximum of the full amount of the bond.
If the surety ends up extending compensation, the bonded contractor must repay it in full. This is part of every bond agreement. Reversely, if the contractor complies with their bond agreement, and no claim is made, they only need to make the initial payment to obtain the bond.
Get Your Bond Here!
You can get started with your bond application by clicking on the banner below. Once you complete our simple bond form, we'll provide you with a free and exact quote on your bond. You will also receive additional information about the bonding process, and how to proceed.
If you have any further questions about getting a contractor license bond or require assistance with the application process, don't hesitate to call us at 866.450.3412!
Further Reading
