Home improvement contractor bond cost
Maryland home improvement contractor’s bond amounts are required in the amount of $20,000. The cost of this particular bond varies based on the principal’s (contractor’s) personal credit report. This bond is issued for a 2-year term.
Why this bond
This bond is required to ensure that the state’s home improvement contractors comply with the Annotated Code of Maryland, Business Regulation Article, Title 8, regarding home improvement regulations. The bond form specifies that it may not be construed to require the surety to be responsible for the completion of any home improvement contract entered into between the principal (contractor) and a client.
Home improvement contractor bond details
The Maryland Home Improvement Guaranty Fund requires these bonds to be issued for 2-year terms. This means premiums are calculated for 2 years of coverage rather than just 1 year of coverage.The following information must be included on the bond form:
- the contractor’s license number
- the contractor’s individual name
- the contractor’s business name (if applicable).
These bonds are continuous until canceled, and if the bond is to be canceled, the state requires the surety company to provide at least 30 days of notice.
Become a home improvement contractor
All applicants must pass an exam proctored by PSI Exams Online prior to licensing. Every application for a Maryland home improvement contractor’s license should include the following:
- copies of conviction records for misdemeanors or felonies related to a home improvement transaction (if applicable)
- proof of at least two years of experience in home improvement work, construction and/or related education
- proof of financial solvency based on the scope and size of the business in relation to total assets, liabilities, credit rating, and net worth
- a certificate of trade name registration
- a surety bond
- proof of current $50,000 liability insurance
Application approval typically takes 2-3 weeks. The licensee will receive his or her license in the mail within 10 days of approval.
Other Important Information
Each home improvement contract must be in writing and must be legible. Contractors can’t accept a deposit or payment from a homeowner until the contract is signed by each party involved in the contract. The agreed-upon price of the home improvement contract should be clearly stated. The contract must also describe each document that it incorporates, such as an architect’s drawings or a building permit, and the homeowner must receive a signed copy of the contract prior to the commencement of work.
Apply for your surety bond
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