A license lets you work. A bond lets them trust you with it.
The bond your license depends on
Most contractors meet the term “license bond” the moment they apply for a license — and misunderstand it just as fast. A contractor license bond is not insurance for your business. It is a financial guarantee, required by your state or local licensing authority, that you will follow the laws and building codes that govern your trade. If you violate them and harm a customer, someone can file a claim against your bond.
What a contractor license bond actually guarantees
A contractor license bond is a three-party agreement. You (the principal) are guaranteeing to the licensing authority (the obligee) — and, through it, to the public — that you will operate lawfully. A surety company backs that promise. If you abandon a job, violate building codes, fail to pull required permits, or otherwise breach the licensing statute, a harmed customer or the board can make a claim.
Here is the part contractors most often miss: the bond protects your customers and the state, not you. If the surety pays a valid claim, you are legally required to pay the surety back in full. It is a credential and a consumer-protection tool — not a substitute for general liability or workers' compensation.
License bond vs. performance and payment bonds
These get confused constantly, and the difference matters:
- A contractor license bond is a *one-time* requirement to get and keep your license. It covers your general conduct as a licensed contractor.
- Performance and payment bonds are *per-project* — required by a specific project owner (usually on public or large private work) to guarantee that one job is finished and its subs and suppliers are paid.
A licensed contractor carries a license bond continuously, then obtains project bonds as individual jobs require them.
How much a contractor license bond costs
Two numbers matter, and people mix them up. The bond amount (or “penal sum”) is the maximum the surety will pay on a claim — set by your state or local authority, not by you. The premium is what you actually pay to obtain the bond, quoted as a small percentage of that amount.
For most contractors with reasonable credit, premium runs roughly 0.5% to 3% of the bond amount per year. On a $15,000 bond that is often around $100–$300 annually. Credit-challenged applicants pay more, and some large or specialty bonds are underwritten more closely. Because the required amount varies by state and license class, the right first step is confirming your exact requirement — which we do before quoting.
Requirements vary by state — and sometimes by city
There is no single national contractor bond. Some states require one statewide bond through a state board; others impose no state-level bond at all and leave it to individual cities and counties; and many set the amount by license class or monetary limit. A few states require a contractor to post a bond only as an alternative to proving financial responsibility.
Because of that, the amount, the authority, and even *whether* a bond is required depend entirely on where and how you are licensed. Use the state links below for the specifics that apply to you.
Contractor License Bond requirements by state
The required amount and authority differ by state — and sometimes by city or county. Select your state below for the specifics, or request a quote and we will confirm the exact requirement that applies to you.
Local city & county requirements
The state is only part of the picture. Many cities and counties require their own contractor license bond — sometimes in addition to a state bond, and in states with no statewide requirement, licensing and bonding are handled entirely at the local level. Amounts and rules vary by locality. Tell us where you operate and we will confirm the exact state and local bonds you need.
Frequently Asked Questions
Is a contractor license bond the same as insurance?
No. A license bond is a financial guarantee that protects your customers and the licensing authority if you violate the law — it does not protect your own business. If the surety pays a claim, you must reimburse it. You still need general liability and, in most states, workers' compensation to protect your operation.
How much does a contractor license bond cost?
You pay a premium equal to a small percentage of the required bond amount — typically 0.5% to 3% per year for contractors with reasonable credit. On a $15,000 bond that is often $100–$300 annually. The exact figure depends on the required bond amount in your state and your personal credit.
What happens if a claim is filed against my bond?
The surety investigates. If the claim is valid, it pays the harmed party up to the bond amount — and then you are legally obligated to reimburse the surety in full. Claims can also jeopardize your license, so they are worth avoiding and resolving quickly.
Do I need a new bond for every project?
No. The license bond is continuous and tied to your license, not a job. Individual projects — especially public work — may separately require their own performance and payment bonds, which are different instruments obtained per project.
Can I get bonded with bad credit?
Usually, yes. Credit affects your premium, not always your eligibility. We work with multiple surety markets, including programs built for credit-challenged and newer contractors, so a low score rarely means no bond — it just changes the rate.
How do I get a contractor license bond through Cory Washington & Co.?
Request a quote or contact our team. We confirm your exact requirement, market your bond across multiple surety companies that compete for it, and handle the filing. Cory Washington & Co. LLC is licensed in all 50 states.
All surety bond descriptions on this website are provided by Cory Washington & Co. LLC strictly for general informational purposes. They are not intended to be, and should not be relied upon as, legal, financial, or bonding advice. Surety bonds are not insurance. Bond requirements — including amounts, obligees, and bond forms — are set by government authorities and other obligees and change over time; the information presented is general in nature and does not guarantee the availability, terms, conditions, or amount of any bond. Actual bond terms are governed by the bond form issued by the surety and the requirements of the obligee, and any bond remains subject to underwriting approval. Nothing on this website creates or implies an agent-client relationship, binds a surety, or issues a bond. Cory Washington & Co. LLC expressly disclaims any liability for actions taken, or not taken, based on the content provided here. For advice regarding your particular situation, please confirm current requirements with the relevant authority and consult directly with a licensed professional at Cory Washington & Co. LLC.