Residential contractor license bond cost
The Oregon Construction Contractors Board mandates that all applicants wishing to become a licensed residential contractor must submit a bond. Like commercial contractors in Oregon, residential contractor bonds are available in varying amounts that are based upon the license for which the applicant is applying. Oregon license classifications require bonds in the following amounts:
- General ($20,000)
- Specialty ($15,000)
- Limited ($10,000)
- Developer ($20,000)
Although the bond amounts for residential contractors are not particularly large, contractor bonds are still considered to be inherently risky. Therefore, the bond will need to be underwritten, meaning that the premium an applicant pays will be determined by a review of the applicant’s credit. With excellent credit,We can get an applicant approved for their bond for as little as 1% of the total bond amount!
Our team of surety experts’ unsurpassed knowledge of the bonding process ensures that you will be bonded quickly, easily and accurately.
Why this bond
Residential contractors are required to purchase a bond before conducting or supervising any residential construction. The bond is intended to protect the public from harm due to any misconduct on the part of the contractor. More specifically, if the contractor violates any terms of the bond, Oregon Revised Statutes Chapter 701 or Oregon Administrative Rules Chapter 812, a claim may be filed against their bond.
If need be, the surety backing the bond will pay out up to the full amount of the bond in order to settle the claim. Upon resolving the claim, the surety will then look to the principal to reimburse them for any money paid out in the claims process. Should the contractor fail to repay the surety in a timely manner, the surety may resort to other legal means in order to collect reimbursement.
Not only can a claim be financially devastating to a contractor, but it will often times prevent them from being bonded in the future. Therefore, it is important that the contractor understands exactly what the bond guarantees.
How long do I need this bond for?
Residential contractor bonds remain in effect for the duration of the contractor’s license and must be renewed each year by paying the surety an annual premium. However, a clause on the bond form does allow for the Surety to cancel the bond at any time by providing the Board with written notice 30 days prior to the proposed cancellation date.
Because a bond is required to be licensed, a contractor whose bond has been cancelled must contact a surety immediately in order to avoid penalties, including by not limited to license revocation.
Become a residential contractor
Each license classification for Oregon residential contractors allows them to engage in specific types of work. For example, residential general contractors are classified to perform the same work as residential specialty contractors, but residential specialty contractors are not authorized to perform the same work as residential general contractors. Since each classification is unique, contractors must make sure that they are applying for the correct license type.
However, all contractors—be it residential or commercial—must complete the following in order to receive their license:
- Determine the type of structures on which you will work
- Complete pre–license training and pass required test
- Structure the company by contacting the Oregon Secretary of State, Corporation Division
- Submit a bond in the correct amount
- Provide proof of all necessary insurance
- Obtain other employer account numbers
- Complete and submit an application along with a $325 fee for a 2–year license.
Apply for your surety bond
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