What is a Utah Contractor License Bond?
Several different types of contractors working in Utah are required to have a license before they are able to work legally with customers. A component of the licensing requirements involves securing a Utah contractor license bond which works as a safeguard for the public. If a contractor fails to abide by state or local laws, building codes, or other regulations, a claim can be made against a Utah contractor license bond to help cover financial losses.
In Utah, the Division of Occupational and Professional Licensing requires residential contractors, small commercial contractors, general engineering and building contractors to obtain a Utah contractor license bond. This type of surety bond is obtained through a surety company which covers valid bond claims. However, the licensed contractor is obligated to repay claims back to the bond provider.
What Does a Utah Contractor License Bond Cost?
The cost of a Utah contractor license bond depends on several different factors, including the total amount of the bond and the personal credit history of the contractor. Depending on the type of license you hold, the bond you are required to post ranges from $15,000 up to $50,000. This, however, is not the price you pay out of pocket for your Utah contractor license bond.
The surety company providing your bond takes a close look at your personal credit history to determine the bond cost. Most contractors pay between 1 and 10% of the total bond amount posted. If you have had court judgments against you, a bankruptcy or foreclosure, or liens reported on your credit, you are a higher risk to the surety company than someone who has a clean credit history. You pay more for your bond when your credit score is low.
How Do I Get a Utah Contractor License Bond?
You can start the process of meeting Utah contractor license bond requirements by filling out a short application online. You will receive a bond price quote based on your credit score and business details, and the surety company will provide instructions on how to meet your bonding requirement after the premium is paid.