Nevada Contractor License Bonds
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 your Nevada contractor license bond needs.
What Are They?
A Nevada contractor license bond is a contractor’s guarantee to abide by all applicable state laws in operating as a contractor within the state of Nevada. Purchasing a contractor license bond is a mandatory step in the process of obtaining a license from the Nevada State Contractor’s Board.
In addition to guaranteeing a certain standard of performance for contractors, a Nevada contractor license bond indemnifies the state against liability for having issued a license to a contractor who subsequently operates in an unlawful or unethical manner. The bond also ensures that there is a way to compensate consumers who incur a financial loss due to a contractor’s noncompliance with the terms of the contractor license surety bond agreement.
Who Needs Them?
Anyone applying for a new or renewal license from the Nevada State Contractor’s Board must purchase a contractor license bond in an amount determined by the Board. That amount will depend on factors like the type of contracting work to be done, the size of the contractor’s jobs, and the contractor’s experience level. To avoid license revocation, there must be a valid contractor’s license bond in place at all times, so the bond must be renewed at each license renewal.
Speak with a Surety Bond Professionals agent today to discuss your bonding needs.
How Do They Work?
The surety bond agreement for a Nevada contractor license bond is a legally binding contract signed by all three of the parties involved:
- As the party requiring the bond, the Nevada State Contractor’s Board is the “obligee.”
- The contractor purchasing the bond is the “principal.”
- The bonding company underwriting and approving the contractor license bond is the “surety.”
The terms of the surety bond agreement indemnify the surety against any financial liability for claims and make the principal solely responsible for paying any and all valid claims. Any consumer suffering a financial loss as a result of the principal’s violation of the terms of the contractor license bond has the right to file a claim against the bond. The surety will determine whether the claim is valid and may try to negotiate an amicable settlement.
When the surety decides that a claim must be paid, it typically will do so on the principal’s behalf. That doesn’t change the fact that the responsibility for paying claims rests entirely with the principal. In paying a claim, the surety is, in effect, lending money to the principal, who must subsequently repay the surety in full or risk legal action by the surety.
What Do They Cost?
The annual premium for a Nevada contractor license bond is a small percentage of the required bond amount (also known as the bond’s “penal sum”). While the obligee establishes the penal sum, the premium rate is set by the surety on a case-by-case basis.
The surety’s main concern is being repaid by the principal for claims paid on the principal’s behalf, so the biggest factor in setting the premium rate for a given contractor is the individual’s personal credit score. The surety will also consider the principal’s business finances and industry experience.
With excellent credit, the premium rate is likely to be in the range of 1.5% to 3%. A person with lesser credit will pay a higher premium rate.
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Our surety bond professionals will get you the Nevada contractor license bond you need at a competitive rate.