Contractors in Orange County must post bonds as per the state of California’s contractor regulations. An OC contractor’s license bond is even required to obtain a contracting license. There are many rules surrounding these bonds, including which ones you need, how much the bond is for, and what to do in the event of a claim being made against them. Sometimes obtaining a contractor bond in Orange County may seem stressful, but a little help from contractor bonding services will set you on the right path.
Why do I need a contractor bond in Orange County?
Contractor bonds are required to protect the public from being left out of pocket. This includes workers. If a project was ever left unfinished, faulty work was not corrected properly, or employees were not paid, then the bond will compensate those financially harmed.
What kind of contractor bond do I need?
While there are a few different contractor bonds available, the one you are required to get is the OC contractor’s license bond before you can receive your license. This is set at a minimum of $15,000. If you are registered as a limited liability company (LLC), then you will also need an additional $100,000 bond.
If you are responsible for the company’s operations and own less than 10% of the business, then you will also need a qualified individual bond. Planning on doing public projects? Then you will also need a bid and/or performance bond. If you are not certain as to which pertains to you, a bond professional will be able to help.
How does an OC contractor’s license work?
A contractor license bond gives the public assurance that they are financially secured should the rare event of something going unfinished in their contracted job. It is a type of insurance for the client, but not for the business. You will still need to make sure you have the proper business insurance needed in place.
If a claim were to be made against your bond, there would be an investigation to ensure that a payout is appropriate. A bond agency will work in your corner to defend these claims, but if you were found to be responsible, then an amount will be paid out. It is then down to you to pay back the full amount, plus legal fees.
Claims against your bond can be avoided by following the obligations set by the bond. This includes following the provisions set out in Division 3, Chapter 9 of the Business and Professions Code for the state of California.
How much does an OC contractor’s license bond cost?
A contractor license bond costs are determined by your personal credit score. It is generally 1-10% of the total amount of the bond (which is at least $15,000). Contractor bonding services will work hard to find you the best rate. You can get a free, no obligation quote to give you a better idea.
Bad credit? That is often not a problem with a contractor license bond, but it will be for other types of bonds like bid and performance, especially if you are a small business. These tend to not be established enough and only have credit to go by. Larger businesses often have a long standing in the industry with the ability to show financial status.
How do I get contractor bond in Orange County?
The state of California has their own requirements you must meet before being able to apply, like owning at least 10% of the business (or you will need the qualified individual bond as mentioned earlier.) Once you have applied and been given approval, you must sign the indemnity agreement and send it back to the state along with any other required paperwork. You will receive your license in one to three weeks’ time.
There are many benefits to working with contractor bonding services. An expert will assess your needs and help determine which bond(s) you need and help find a great rate. They will also be there in the event of a claim being made. Our contractor bonding services will see to it that your bonds are dealt with in a professional manner and answer any questions you may have. Contact our team today to see how we can work for you.
Contact the bond experts at contractorbond.org today for a FREE quote!