Commercial contractor license bond cost
All commercial contractors in Oregon are required to submit a bond to the Construction Contractors Board in order to receive their license. The amount of the bond required is dependent upon the license for which the contractor is applying. Bonds must be submitted in the following amounts for these commercial licenses:
- Level 1 General Contractor ($75,000)
- Level 2 General Contractor ($20,000)
- Level 1 Specialty Contractor ($50,000)
- Level 2 Specialty Contractor ($20,000)
- Developer ($20,000)
Due to the large bond amounts and the inherent risk of claims against contractor bonds, the premium an applicant will pay is determined by a review of their credit by a surety underwriter. However, with exceptional credit, we can get approvals on all Oregon commercial contractor bonds for as little as 1%. So, a contractor needing a Level 2 general contractor bond may pay just $200 for their bond!
Why this bond
No matter what kind of license is being sought by an applicant, all commercial contractors in Oregon must purchase a bond in order to protect their clients from harm as a result of the contractor’s failure to abide by all terms established by the bond, as well as any relevant regulations—specifically Oregon Revised Statutes Chapter 701 and Oregon Administrative Rules Chapter 812.
If a valid claim is made against the contractor’s bond, the surety will pay up to the full amount of the bond in order to reach a settlement with the claimant. Once a settlement has been reached, it is the responsibility of the contractor to reimburse the surety for all money paid out in the claims process.
How long do I need this bond for?
Because of the protections offered by a bond, commercial contractors in Oregon are required to remain bonded with the Construction Contractors Board for the entire duration of their license. These bonds are effective for twelve months and must be renewed annually until the contractor wishes for their license to expire. However, the surety may cancel the bond at any point by providing the Board with 30 days’ advance written notice. Should a contractor’s bond be canceled, it is of the utmost importance for them to obtain a new bond immediately in order to avoid any negative repercussions.
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