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Maryland Contractor License Bond

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What is a Maryland Contractor License Bond?

Many states throughout the country require construction contractors to have a license in order to work on projects in certain states. In Maryland, construction contractors must have a license if they plan to work on home improvement projects, and with that license comes a need to post a Maryland contractor license bond. This is a type of surety bond meant to protect the customers of Maryland contractors.

A Maryland contractor license bond provides some assurance to residents of the state that licensed contractors will work in line with current codes and regulations. Should a contractor fail to do so, a claim can be made against a Maryland contractor license bond to help offset financial losses.

Who Needs a Maryland Contractor License Bond?

Home improvement contractors are required to have a license and a Maryland contractor license bond if they wish to work on residential projects in the state. Additionally, some specialty contractors working in Maryland may need a contractor license bond based on local licensing guidelines. Plumbers, HVAC professionals, and electricians must have appropriate licensing and meet bond requirements to comply with local laws.

For the state requirement imposed on home improvement contractors, individuals who cannot show a positive net worth of at least $20,000 must secure a Maryland contractor license bond.

Maryland Contractor License Bond Obligee Details

As a surety bond, a Maryland contractor license bond is a three-party contract. The licensed contractor is known as the principal of the bond, or the person responsible for posting the bond. The surety company provides the bond on behalf of the contractor, and the local or state licensing authority acts as the obligee of the bond, or the organization requiring a bond to be in place.

Local licensing authorities are the listed obligee of a Maryland contractor license bond for specialty contractors. For state bonding requirements, the Maryland Home Improvement Guaranty Fund is the obligee.

How Much Does a Maryland Contractor License Bond Cost?

A contractor license bond, similar to other surety bonds, may vary in terms of the amount required by state or local authorities. The amount of the bond plays a part in how much the bond costs to put in place. For example, a Maryland contractor license bond for home improvement contractors working in the state must be at least $20,000. However, the contractor does not pay this full amount.

The surety company providing the bond calculates a bond premium that the contractor will pay. The bond premium is a percentage of the total bond amount, typically falling between 1 and 10% of the bond required. Because the surety company takes on some risk when issuing a bond, a contractor's credit history is evaluated at the time of application. Individuals with lackluster credit or a bad credit history will pay a higher bond premium.

How do You Get a Maryland Contractor License Bond?

To start the process of getting a Maryland contractor license bond, contractors can provide details about the bond type and amount they need, online. The surety company reviews this information along with credit history to determine the premium due. After payment, the bond is in place until it renews, one to two years after it is issued.


Frequent Questions

How much does a bond cost?

Pricing is a percentage of the contractor license bond amount that’s required of you, which is based on your personal credit. Use our bond pricing tool to to get a quick ballpark estimate.

Can I get bonded with bad credit?

Yes. You can apply and get bonded with bad credit. Our agency is the largest writer of bonds in the county, which allows us to approve contractors for bonds when other agencies cannot.

Are these the same as contract bonds?

No. Contractor license bonds ensure you will abide by the laws of your state, city or municipality when performing contracting work. Contract bonds guarantee public projects will be completed properly and are a separate bond type. You can learn more about contract surety bonds by visiting the contractor bond center.

Do I need a state or local bond?

It depends on who is requiring the bond of you, the local municipality, county or state. Depending on your location, it is possible you may need both a local and state bond, as contractor license bond requirements can vary drastically. You can select your state to see a full list of contractor license bond requirements.


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Our company has been with JW Surety for several years now so when we needed to obtain a bond for a new company, we immediately went to them for help. Our rep, Melissa, was extremely helpful and prompt which made the process extremely easy for me.
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Trying to get a local Surety Bond was like driving a car on three tires. I searched Surety Bonds and found JW Surety Bonds. I got online and filled out the information and with in 30 minutes received a response from Melissa. She was informative, friendly and helpful. One more super satisfied customer.

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About JW Surety Bonds
We are a family owned and operated agency established in 2003. We started with just two people, and grew to become the largest volume bond producer in the nation with 50+ employees. Since day one, our team focus has been on providing real-time online quotes, an easy process, and the best in claims defense. Learn more about our company.