What is a Georgia Contractor License Bond?
Any construction contractor working on residential or commercial projects must have a valid license in order to do business in Georgia. In addition, some counties require posting a Georgia contractor license bond before getting a license. A Georgia contractor license bond works as a safeguard for customers and project owners, helping ensure licensed contractors will complete work according to state laws and building codes.
A Georgia contractor license bond involves three different parties: the surety company which provides the bond, the principal which is the licensed contractor, and the obligee, which is the state or local authority requiring a bond to be in place. When a customer or project owner submits a legitimate claim against the bond, the surety company pays compensation to cover financial damages. The contractor, then, repays the claim amount. Because of this structure, it is essential to keep bond claims to a minimum.
Do I Need a Georgia Contractor License Bond?
Both residential and general contractors operating in Georgia must meet a statewide requirement to secure a license to do business. In addition, many cities and counties throughout Georgia have a licensing requirement for contractors. With both licensing processes, a Georgia contractor license bond may be necessary to ensure full compliance with the law. Georgia contractors working on the following projects may be subject to licensing and bonding regulations:
- Residential contractors
- General contractors
- Commercial contractors
- Specialty contractors
- Water well and driller contractors
Georgia Contractor License Bond Obligee Details
Under Georgia state law, general contractors are required to have a valid license if they wish to complete projects on either a residential or commercial level. With this license requirement comes the need for a Georgia contractor license bond. The obligee of the statewide surety bond requirement is the Georgia State Licensing Board for Residential and General Contractors. Licensed contractors may use the contact information below for the board:
State Licensing Board for Residential and General Contractors
237 Coliseum Drive
Macon, Georgia 31217
What Does a Georgia Contractor License Bond Cost?
A Georgia contractor license bond of either $20,000 or $25,000 is necessary, depending on the type of work performed. However, contractors are not required to pay the full bond amount. Instead, a surety company calculates a bond premium, the cost of the bond, as a percentage of the total. The bond premium you pay typically ranges from 1 to 10%.
The premium you pay for a Georgia contractor license bond depends on your financial track record. The surety company reviews your personal credit score and business financials to evaluate how much risk you pose as a bondholder. If that risk is high, meaning you have a low credit score, you will likely pay a higher bond premium.
How Do I Get a Georgia Contractor License Bond?
You can start the process of securing your Georgia contractor license bond by submitting a brief online application. After your credit score and other application details are reviewed, you receive a quote for your bond premium and information on how to complete the bonding process.
Renewal Term and Expiration Date of Georgia Contractor License Bonds
The statewide contractor license for residential and general contractors expires on June 30 of even-number years. This two-year term coincides with the expiration date of the Georgia contractor license bond as well, and both the license and surety bond must be renewed to maintain an active license. The surety company providing your Georgia contractor license bond sends renewal information in advance of this expiration date along with instructions.