In this article we will review the requirements you need to obtain a contractor’s license in the state of Oklahoma.
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 Oklahoma contractor license bond needs.
What Contractor Licenses Are Issued in Oklahoma?
Oklahoma licenses specialty contractors in the construction industry (electrical, plumbing, mechanical) at the state level, through the Oklahoma Construction Industries Board. General contractors are not licensed by the state but may be subject to local licensing requirements, depending on the counties and municipalities in which they work.
What Are the Steps in the Licensing Process?
The eligibility criteria and licensing requirements for specialty contractors are clearly defined on the OCIB website. While the specific procedures differ for each specialty, all specialty contractors must document proof of experience and pass a licensing exam. Once candidates have passed their exam, they must provide proof of sufficient liability insurance and furnish a $5,000 contractor license bond before their license will be activated.
Each local jurisdiction that requires licensing of general contractors has its own eligibility criteria and licensing procedures. While those procedures don’t involve taking an exam, they do entail meeting insurance and bonding requirements.
Why is a Contractor License Bond Required?
Whether at the state or local level, a contractor license bond provides financial protection for the licensing body and the public. It does this by guaranteeing that the licensed contractor will comply with all applicable laws and building codes and giving those who experience financial harm due to violations committed by the contractor a way to be compensated for their loss.
How Are Contractor License Bond Claims Paid?
A contractor license bond is a legally binding agreement among three parties: the licensing authority (known as the bond’s “obligee”), the contractor (the “principal”), and the bond’s guarantor (the “surety”). The principal is legally obligated to pay all valid claims against the bond, and the surety guarantees that they will be paid. Consequently, standard practice is for the surety to pay a claim initially and then be reimbursed by the principal. This ensures that the claimant receives prompt payment and gives the principal a little time to repay the surety for the resulting debt.
How Much Does an Oklahoma Contractor License Bond Cost?
To calculate the annual premium for an Oklahoma contractor license bond, multiply the required bond amount (established by the obligee) by the premium rate (set by the surety). The surety’s main concern is the risk exposure that comes from paying claims on behalf of the principal and waiting to be repaid. The best indicator of what that risk level might be is the principal’s personal credit score. Someone who has managed credit responsibly in the past is unlikely to renege on paying the surety back.
A high credit score suggests that the risk to the surety is low, which deserves a low premium rate—potentially as low as 1%. A low credit score, on the other hand, is indicative of a higher risk level, which warrants a higher premium rate, conceivably as high as 3%.
Get A Quote
Our surety bond professionals will get you the Oklahoma contractor license bond you need at a competitive rate.