What is a Washington Contractor License Bond?
Construction contractors working in Washington state are required to hold a valid license in order to do business on either residential or commercial projects. Part of the licensing requirements for contractors is obtaining a surety bond, known as a Washington contractor license bond. This bonding requirement helps ensure the vendors, suppliers, and customers who engage in business with a licensed contractor are protected in case things do not go as planned.
A Washington contractor license bond protects individuals and businesses when a licensed contractor fails to complete a project or does not complete work in line with state regulations or code.
Who Needs a Washington Contractor License Bond?
In Washington, only certain construction contractors are required to get a license and a Washington contractor license bond. Specialty contractors must have a valid license as well as post a bond, and the same is true for electrical contractors. General contractors must also have a license in order to perform work legally, and a bond is required for these contractors as well.
In some cases, other contractors may be required to secure a Washington contractor license bond, depending on the work they perform and whether it is commercial or residential. For instance, structural pest inspectors, side sewer, and fire sprinkler contractors must have a license and a bond when working in the state.
Washington Contractor License Bond Obligee Details
A Washington contractor license bond works like any other surety bond, contractually obligating three parties. The licensed contractor is known as the principal of the bond, while the surety company is the provider of the bond. The obligee, which is represented by a department of the state, is the licensing authority requiring a bond to be posted.
Washington contractor license bonds have the following obligee information:
Washington State Department of Labor and Industries
7273 Linderson Way SW
Tumwater, Washington 98501
How Much Does a Washington Contractor License Bond Cost?
The cost of a Washington contractor license bond depends on the total amount of the bond required by the state. The bond amount is based on the type of contractor license an individual holds. A general contractor performing work in Washington must have a bond of at least $12,000 in place, while a specialty contractor is required to post a $6,000 bond. Electrical contractors must have at least a $4,000 bond to meet licensing requirements. However, as a contractor, you do not pay the full amount of the bond upfront.
Bond prices are calculated as a percentage of the bond amount, typically ranging from 1 to 10%. Licensed contractors with a strong credit history pay a lower percentage, as they present a lesser risk to the surety company providing the bond. Washington contractor license bonds are still available to those with less than ideal credit histories, but the cost of the bond is higher.
How do You Get a Washington Contractor License Bond?
You can start the easy process of getting a Washington contractor license bond by submitting a brief quote form online. The surety company provides the price for your bond, depending on the bond amount, type, and credit history. Once payment is submitted and details about the contractor business are provided, the surety company finalizes the bond information.