A contractor’s license bond refers to the requirements that need to be met before an active license is issued, activation of an old license and continued maintenance of an already renewed license. Basically, these requirements are there to protect consumers who might be affected by defective constructions or any other violations of the license law. It also benefits employees who have not been paid as a result of their work.
Requirements For The Bond
• First, the bond should have been written and compiled by a surety company through the specific state’s insurance department(California Contractor Bonds are really popular)
• The name of the business and the number on the license should correspond to that written in the state’s records
• There should be a signature from the attorney of the surety company on the bond
• The form on which the bond is written should be approved by the Attorney General’s office
Besides the contractor’s bond, an individual might also be required to have a bond of qualifying individual before any license has been issued or reactivated. Requirements for this bond are also similar to those of the contractor’s license bond. If an individual’s license has been revoked due to any violations in the law, the company in question is required to fill a disciplinary bond with the registrar. This allows the registrar to consider reissuing or reinstating the license. Requirements for the disciplinary bond include:
• The disciplinary bond can’t be replaced with any other bonds but rather must be filed together with all the other bonds in order to be considered.
• Depending on the violation in question, the registrar will determine the bond amount
• The bond must always be updated and remain current on file at the registrar’s office for a period of at least 2 years.
All the other requirements match exactly with those of the contractor’s license bond and the bond of qualifying individual. Also most states like California only require one California contractor bond.