Contractor license bonds: How to determine cost

Contractor license bonds: How to determine cost

Plumbers who need a bond to comply with state or local laws should understand the factors that affect their bond premium A critical determinant of a bond’s premium is whether the bond is instant issue or credit-based For credit-based bonds, the bond amount will affect the premium the applicant pays as premiums are calculated as a percentage of the total bond amount Credit-based bonds require applicants to undergo to a review of their credit report A contractor’s experience in the industry can factor into the bond’s premium An important distinction must always be made between contract bonds and contractor license bonds

Some licensing authorities require that plumbers file a surety bond before they can be legally licensed. Licensing regulations vary by jurisdiction, of course, so plumbers should always check with the local government agency that regulates licensing to determine specific requirements. Plumbers who need a bond to comply with state or local laws should understand the factors that affect their

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