Contractor’s License Requirements in Nevada

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In this article we will review the requirements you need to obtain a contractor’s license in the state of Nevada.

Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your Nevada contractor license bond needs.

What Contractor Licenses Are Issued in Nevada?

Nevada issued contractor licenses in three categories:

  • Class A—General Engineering Contractor license (a technical license requiring special engineering knowledge and skill)
  • Class B—General Building Contractor license (for general contractors)
  • Class C—Specialty Contractor license (for contractors specializing in one or more of the dozens of trades or crafts requiring a license in Nevada)

Depending on the specific services you offer, you may need to be licensed in more than one category.

What Are the Steps in the Licensing Process?

You’ll have to accomplish certain prerequisite tasks before you submit your application for a contractor license. For example, you’ll need to:

  • Register your business with the Nevada Secretary of State’s office.
  • Have a financial statement prepared.
  • Create a resume documenting a minimum of four years of relevant experience.
  • Request reference certificates from four people who have experience with your work.
  • Complete a background disclosure and have your fingerprints taken

After completing all of the above, fill out your application and submit it with all supporting documents and payment of the application fee (currently $300). 

After your application is reviewed, you’ll be notified to register for the general Business and Law exam and any trade examination that may be required for a specialty contractor license. Once you’ve passed your exam(s), you’ll still need to:

  • Pay the licensing fee (currently $600, payable every two years)
  • If you’re a residential contractor, contribute to the Residential Recovery Fund
  • Provide evidence of workers’ compensation coverage if you will have employees
  • Purchase a Nevada contractor license bond or make a cash deposit in the amount stated in the letter approving your license application

Why is a Contractor License Bond Required?

Strictly speaking, a bond is not required if you choose to make a cash deposit instead. However, most contracts choose the surety bond option to avoid tying up their cash. In either case, the purpose is to provide financial protection for licensing authority (the bond’s “obligee) and for the public in the event that the contractor (the bond’s “principal”) commits an unlawful or unethical act that causes them financial harm. An injured party experiencing such a loss can file a claim against the bond and be compensated for their loss. There is a third party to a Nevada contractor license bond—the “surety,” the company guaranteeing that the principal will pay all valid claims. 

How Are Contractor License Bond Claims Paid?

The usual practice is for the surety to pay a valid claim initially, on behalf of the principal, and then be reimbursed by the principal. The terms of the surety bond agreement indemnify the surety against any responsibility for paying claims and legally obligate the principal to pay them. The principal’s failure to repay the debt to the surety can result in the surety taking legal action to collect on it.

How Much Does a Nevada Contractor License Bond Cost?

The annual premium for a Nevada contractor license bond is the product of multiplying the required bond amount by the premium rate that the surety assigns on a case-by-case basis. The primary factor that’s considered is the principal’s personal credit rating, which is the best predictor of the likelihood that the principal will reimburse the surety for claims paid on the principal’s behalf.

The surety recognizes the low risk presented by a highly creditworthy principal and typically set the premium rate in the 1% to 2% range. On the other hand, the higher risk presented by a principal with a low credit score warrants a higher premium rate—as high as 3% to 5% in some cases.

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