What is an Oregon Contractor License Bond?
Contractors working in Oregon on either commercial or residential projects must hold a valid license in order to work legally in the state. Part of the licensing requirements is getting an Oregon contractor license bond. This type of surety bond ensures that a licensed contractor abides by state laws, protecting customers, employees, and the state licensing authority from fraudulent business practices.
An Oregon contractor license bond is a three-party contract involving a surety, a principal, and an obligee. The surety is the company providing the bond to the licensed contractor, known as the principal. The obligee is the licensing authority responsible for construction contractors working in the state. Should a claim against a bond happen, the surety initially compensates the customer or employee for financial losses. However, the licensed contractor is responsible for repaying the claim amount.
What Does an Oregon Contractor License Bond Cost?
Similar to other surety bonds, an Oregon contractor license bond is priced as a small fraction of the total bond requirement. If a $10,000 bond is necessary, you pay a percentage between 1 to 10% as the bond premium. Depending on the type of work you perform as a contractor, the bond amount required for your license may be as low as $10,000 and as high as $75,000.
An Oregon contractor license bond premium is based on your personal credit score along with details about your business financials. Having excellent credit means you will pay a lower percentage while bad credit leads to a higher bond price. You can still get a bond with bad credit, but the surety company will charge more for your Oregon contractor license bond until your credit improves.
How Do I Get an Oregon Contractor License Bond?
Securing your Oregon contractor license bond is a simple process. You can submit a fast and easy online application to get a quote for your bond based on your business and personal financial standing.