What is a Wyoming Contractor License Bond?
In Wyoming, many construction professionals must obtain a valid business license in order to work on residential or commercial projects in the state. Although there is no statewide requirement for resident contractors to get a contractor license, several counties, cities, and towns make this a necessary task. Part of the licensing requirements for construction contractors is obtaining a Wyoming contractor license bond.
A Wyoming contractor license bond is a type of surety bond specifically designed to safeguard the customers the contractor does business with as a licensed professional. If work is not performed in line with local rules and regulations, a claim can be made against the bond to help cover financial damages.
Who Needs a Wyoming Contractor License Bond?
Local licensing authorities throughout the state of Wyoming require contractors to post a contractor license bond to meet licensing rules. The types of contractors that must secure a Wyoming contractor license bond varies from one jurisdiction to the next. However, the most common construction professionals who may need to obtain a bond include general contractors, HVAC professionals, electrical contractors, and plumbing specialists.
In order to know if a Wyoming contractor license bond is needed, check with the local licensing agency to determine the requirements for having a contractor license.
Wyoming Contractor License Bond Obligee Details
Surety bonds like a Wyoming contractor license bond involve three parties under a contractual agreement. The contractor is known as the principal of the bond, or the one required to post the bond as part of his or her licensing rules. The surety company provides the bond to the contractor and pays claims on their behalf. However, contractors are required to repay any claims over time. The obligee of the bond is the licensing authority requiring a bond to be posted.
Because there is no statewide requirement for contractors in Wyoming to secure a bond, the obligee varies from one location to the next. The city or county requiring the bond is the obligee, and bonds should list this information on the bond certificate.
How Much Does a Wyoming Contractor License Bond Cost?
A Wyoming contractor license bond is different in terms of the amount required based on where the contractor is licensed and plans to complete projects. For instance, Lander City requires a bond of no less than $2,000, while Sheridan City requires a bond of $10,000 for licensed contractors. However, this is not the out-of-pocket price a contractor pay for a bond.
The surety company providing the bond calculates the price paid for coverage based on the bond amount and the credit history of the contractor. This is known as the bond premium, and it ranges from 1 to 10% of the bond in most cases. The bond premium is on the higher end of the range when contractors have less than ideal credit.
How do You Get a Wyoming Contractor License Bond?
Licensed contractors who are required to post a Wyoming contractor license bond can start the simple process by submitting a brief online form. The surety company will ask for details about the bond amount and the type of bond required. After submitting the form, contractors can view their bond premium and make payment. Wyoming contractor license bonds may need to be renewed in-line with the expiration date of a contractor's license.
