How Much Does a Contractor License Bond Cost?

Do you have your contractor’s license bond yet? If not, you’ll need one soon! In many states (including California!), you can’t work as a licensed contractor without one. Becoming bonded doesn’t have to be inconvenient or expensive. For more information on how affordable your bond could be, read on.

How Much Your Bond Needs To Cover

If your state license board requires you to have a bond, make sure you know how much you need to be bonded for.

  • Live in the Golden State? The required bond amount in California is $15,000. (The state used to require bonds be $12,500. That number rose on January 1, 2016.)
  • In Alaska, the required bond amount for general contractors is $10,000.
  • In Nevada, the amount can vary between $1,000 and $500,000.

Check with your state license board to learn what the required amount is for a license bond.

But wait, you might be thinking. Does this mean California contractors have to pay $15,000 for a license bond?

Nope.

But in order to know how much your bond costs, you need to know how much it covers.

How Much You Pay

Your surety company will charge you a certain percentage of your total bond amount as a premium.

How much it will cost you to get a bond from your surety company will vary. The premium on your license bond will be based on factors such as:

  • Your personal credit.
  • Your experience.
  • Whether or not you’ve had a claim filed against a previous bond.

Your premium could be as low as 1% to 3% of the total bond amount. However, if you have bad credit or have had a claim filed against a license bond before, that number might be higher.

Generally speaking, you’ll pay somewhere between 1% and 15%. On a $15,000 bond that means your premium cost could range from:

  • Low Risk (1% - 3%): $150 - $450 premium
  • Higher Risk (4% - 15%): $600 - $2,250 premium

Bond Prices and Your Credit

The biggest factor in the price of your license bond is your personal credit history. But your credit doesn’t always tell the entire story, and other factors may be considered in your bond premium pricing.

Even if your personal credit history is a bit shaky, other factors may help paint a picture of your financial ability to repay a bond, such as:

  • Personal financials
  • Business financials
  • Cash on hand
  • Industry experience

If your overall financial picture demonstrates that you are able and willing to repay a bond claim, the surety company underwriting guidelines may still be able to accommodate a lower premium rate for your bond.

The easiest way to know what your bond will cost is to get a quote. Here’s how:

How To Apply For A Bond

Applying for your contractor license bond doesn’t have to be complicated. We can issue your bond instantly, just submit an application.

To get started on your application, you’ll need your contractor license number or your license application fee number.

Once you’ve submitted your application, you’ll receive a quote for your bond.

Having a license bond isn’t just a state requirement, it’s part of being a responsible business owner. It tells your clients that you’re covered in case something goes wrong, and makes you look more professional. Ultimately, being bonded and insured makes your business more competitive. So, ready to submit your application?


9855 Prospect Avenue - Suite D
Santee, CA 92071
Phone - 888.815.7639
Fax - 619.465.1926
CDI # OD94594