What is a Mississippi Contractor License Bond?
In Mississippi, certain professionals need to maintain a contractor license in order to do business in specific counties throughout the state. A Mississippi contractor license bond is part of the license application requirements. This type of surety bond ensures that licensed contractors abide by state rules and regulations, building codes, and do business with customers and employees according to local laws.
A Mississippi contractor license bond is a contract between the principal required to obtain a bond, the state or local licensing authority as the obligee requiring the bond, and a surety company providing the bond to the principal. When a customer or employee has a legitimate claim for losses against a contractor, payment is made from the surety company up to the limit of the bond. However, the contractor is responsible for payment of any claims.
What Does a Mississippi Contractor License Bond Cost?
Like other surety bonds, a Mississippi contractor license bond is priced as a percentage of the total bond put in place. Depending on the location of your contractor business, a bond between $5,000 and $10,000 may be necessary. Contractors from out of state may have to post a larger bond. Fortunately, the cost of a Mississippi contractor license bond ranges from 1 to 10% of the bond total.
The price you pay for a contractor license bond in Mississippi depends on your personal credit score, past claims history, and business financial standing. Most importantly, your credit score dictates how much of a risk you may be to the surety company providing your bond. The lower your credit score, the higher your bond premium is likely to be.
How Do I Get a Mississippi Contractor License Bond?
Licensed contractors can obtain a Mississippi contractor license bond by submitting a brief online application. Once the surety company evaluates your application details, you receive a quote for your bond and instructions on completing the bond process.