What is an Ohio Contractor License Bond?
Although there is no statewide requirement for contractors working in Ohio to hold a contractor license, many counties and cities throughout the state have their own set of rules and regulations. Contractors in either residential or commercial lines of work may need to obtain a contractor license as well as an Ohio contractor license bond in order to work legally.
An Ohio contractor license bond is a type of surety bond that offers security to customers of contractors. This bond ensures that compensation will be paid if a customer suffers financial losses due to a contractor’s negligence or fraudulent activities on a project. An Ohio contractor license bond is provided by a surety company, and claims are paid on the contractor’s behalf. However, any successful claims must be repaid by the contractor, making it essential to keep claims to a minimum when possible.
What Does an Ohio Contractor License Bond Cost?
Each county or city requiring a licensed contractor to post a bond has its own requirements for how much of a bond is necessary. The total bond amount needed can range from $5,000 up to $25,000 in many areas of Ohio, but contractors are not responsible for paying this entire amount. The surety company determines the bond premium, or percentage of the total bond amount, that a contractor must pay to post a bond.
An Ohio contractor license bond premium varies from one person to the next because rates are based on personal credit score and business financial standing. A low credit score does not necessarily mean you cannot obtain an Ohio contractor license bond; it does mean, however, the bond premium you pay is higher compared to a contractor with a strong credit score.
How Do I Get an Ohio Contractor License Bond?
Obtaining an Ohio contractor license bond is a straightforward process that starts with applying through a brief online form. The surety company reviews your application details to determine your approval and bond premium, and you can complete the bonding process once this premium is paid.