What is a Florida Contractor License Bond?
Contractors in Florida may be required to have a license to do business with residential or commercial customers when working in the state. The licensing requirements may also include obtaining a Florida contractor license bond which is a type of surety bond. A Florida contractor license bond provides protection to customers of licensed contractors to help prevent fraudulent and illegal practices when working on a project. Should a customer suffer financial losses in the process, a claim can be made against the bond for compensation.
A Florida contractor license bond works like other surety bonds as a three-party contract. The licensed contractor is the principal, while the obligee is the local municipality requiring the bond to be posted. The surety company provides the bond to the principal, and pays for claims when they arise. However, the contractor required to repay the claim amount if found to be valid.
Who is Required to Get a Florida Contractor License Bond?
Florida contractors may be required to hold a valid license if they work in specific categories in the construction industry. If a license is necessary, a Florida contractor license bond may also be a requirement. Some of the most common licenses that require a Florida contractor license bond include:
- Speciality contractors
- Mechanical contractors
- Roofing contractors
- HVAC contractors
- Plumbing contractors
- Residential and commercial contractors
- General contractors
Obligee Details for Florida Contractor License Bonds
In the state of Florida, contractors may be required to complete a licensing process based on state law. When the state requires licensing, a Florida contractor license bond may also be necessary. The Florida Construction Industry Licensing Board is responsible for processing licensing requests and renewals, and acts as the obligee of a Florida contractor license bond. The agency’s contact information is as follows:
Division of Professions
Construction Industry Licensing Board
2601 Blair Stone Road
Tallahassee, Florida 32399
When local licensing requires a surety bond, the city or county’s licensing authority acts as the obligee for the bond.
What Does a Florida Contractor License Bond Cost?
The bond amount a licensed contractor needs varies depending on the type of work he or she will perform. Division I contractors must post a $20,000 bond, while Division II contractors need either a $10,000 or $5,000 bond. However, you do not pay the entire amount of the Florida licensed contract bond. Bond premiums, or the cost of the bond, are calculated as a percentage of the total, often ranging from 1 to 10%.
The bond premium you pay depends on a few factors, including your personal credit score and business financial strength. A high credit score means you will pay between 1 and 3% of the bond total, while a low score requires you to pay a higher premium.
How Do I Get a Florida Contractor License Bond?
Getting a Florida contractor license bond starts with a brief application submitted online. Once the surety company has an opportunity to review your application details, you are provided a quote for your bond premium and guidance on how to finalize the process.
Expiration Date and Renewal for Florida Contractor License Bonds
Licensed contractors working in Florida renew a certified or registered license on August 31 of either even-numbered or odd-numbered years, depending on the type of license they hold. The expiration date of a Florida contractor license bond is the same as the renewal date for the license. Renewal information and instructions to complete the process are provided by the surety company issuing the Florida contractor license bond.