What is an Oklahoma Contractor License Bond?
In Oklahoma, contractors in many different specialties are required to hold a license to work legally. Before getting licensed, an Oklahoma contractor license bond may also be necessary, depending on the city or county where a contractor plans to work with customers. The purpose of the Oklahoma contractor license bond is to provide security to the public that when working with a contractor, he or she will perform the obligations of a project in line with state and local laws and building codes.
An Oklahoma contractor license bond is an agreement between three specific parties. The principal is the licensed contractor who must post a bond. The obligee is the state or local licensing authority that requires a bond to be in place. Finally, the surety company provides the bond to the contractor and pays legitimate claims for compensation to customers of the contractor.
What Does an Oklahoma Contractor License Bond Cost?
The amount of an Oklahoma contractor license bond which must be in place in order to obtain a contractor license varies from one location to the next. Typically, a bond between $1,000 and $10,000 must be posted to comply with local regulations. However, this is not the amount you pay for an Oklahoma contractor license bond.
Contractors pay only a small percentage of the total bond requirements, often between 1 and 10%. This is known as the bond premium, and it is determined by the surety company providing the bond. If you have a low credit score, you pose a higher risk to the surety company and therefore, pay a higher premium for your bond.
How Do I Get an Oklahoma Contractor License Bond?
Meeting the bonding requirements as a contractor in the state begins with submitting an application for your Oklahoma contractor license bond. This simple process involves the surety company reviewing your credit score and business details, and providing a fast quote for your bond premium.