Licensing and Bonding for Landscapers
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 landscaper license bond needs.
Who Needs a Landscaper License?
Landscaper licensing requirements vary widely by state. Some states issue landscaper licenses, while others treat landscaping as a specialized form of contracting. Licensing requirements also vary according to the type of services a landscaper provides. For example, a landscaper who applies pesticides must be certified in pesticide application, which is–most often–handled by the state’s agriculture department.
Some states require a passing score on a licensing exam, while others have no state licensing requirement for landscapers, though a license may be required at the local level. And some states have several landscaper licensing categories, such as lawn care, tree trimming, land preparation, and so on.
If you’re planning to start up a new landscaping business, you’ll need to do some research to determine what the license and bonding requirements are in the state or municipality in which you will be operating.
In most cases, when a landscaping license is required, you will need to purchase a landscaper license bond. If there is a license bonding requirement, there must be an active bond in force at all times to avoid license revocation.
What Are Landscaper License Bonds?
Landscaper license bonds ensure that licensed landscapers operate in full compliance with applicable laws and regulations. They provide financial protection for clients and for the licensing entity requiring the bond, referred to as the bond’s “obligee.”
In purchasing a landscaper license bond, the landscaper, known as the bond’s principal, agrees to operate lawfully and ethically or pay claims for damages experienced by the obligee or a client because of the principal’s violation of the legally binding surety bond agreement.
Speak with a Surety Bond Professionals agent today to discuss your bonding needs.
How Do They Work?
In addition to the obligation and the principal, there is a third party to the landscaper license bond—the “surety.” The surety guarantees the bond, specifically the payment of claims by the principal.
When a claim is received, the surety investigates to determine whether it is valid and should be paid. Then, in its role as guarantor, the surety typically pays the claim on behalf of the principal and is subsequently reimbursed by the principal. Because the principal is legally obligated to pay all valid claims, the surety has the right to take legal action if repayment is not received within a reasonable period.
What Do They Cost?
Landscaper license bonds are sold for an annual premium that is a small percentage of the required bond amount, also known as the bond's penal sum. The exact amount of that premium depends on the penal sum and the premium rate assigned by the surety when the bond is purchased.
The surety's primary concern is being repaid for claims paid on behalf of the principal. Therefore, the premium rate is determined through an underwriting assessment of the principal’s creditworthiness.
An individual with a high personal credit score, all other things being equal, is assumed to be a low risk to the surety and therefore is assigned a correspondingly low premium rate. Someone with bad credit, however, is considered a bigger risk, which warrants a higher premium rate. Depending on where you fall on the risk spectrum, your premium rate could be less than one percent or as much as three percent.