Contractor license bond
The license bond many states and licensing boards require contractors to post as a condition of holding a license.
What it is
A contractor license bond is a surety bond many states, counties, or licensing boards require you to post to get or keep a contractor license. It is generally intended to assure that you follow the licensing rules and contract laws that apply to your trade — and to give customers and the agency a way to recover for covered violations.
Who requires it
- •State licensing boards — Many states require a license bond at a set amount as a condition of issuing or renewing a contractor license.
- •Cities and counties — Some local jurisdictions require their own contractor or trade bond on top of the state requirement.
What drives the price
- •Required bond amount — The obligee sets the bond amount; premium is a percentage of it, so a larger required bond costs more.
- •Your credit — Most license bonds are credit-based — stronger credit generally means a lower rate.
- •Trade and history — Your specific trade and any prior claims can affect the rate carriers offer.
How surety bonds work
A surety bond is a three-party agreement between you (the principal), the government agency or party requiring it (the obligee), and the surety company that backs it. It is not insurance for you — it protects the obligee and the public. If a valid claim is paid on your bond, you are responsible for reimbursing the surety. Premium is a small percentage of the bond amount and is driven mostly by the required bond amount and the applicant’s credit.
Ready to get bonded? Quote and buy your contractor license bond online.
Quote & buy at SuretyBondly →Frequently asked questions
Is a license bond the same as insurance?
No. A license/surety bond is a guarantee to the public and the licensing agency; if a claim is paid, you repay the surety. General liability insurance is generally intended to protect you against third-party claims. Many contractors need both.
How much does a contractor license bond cost?
Premium is a percentage of the required bond amount and depends mostly on that amount and your credit. There is no single rate — a quick quote shows your number.
How fast can I get bonded?
Many standard license bonds can be quoted and issued quickly online once the bond amount and basic details are entered.
Get the small-business insurance newsletter
Plain-English coverage tips, comparisons, and offers — no spam, unsubscribe anytime.