What is an Electrical Contractor Bond?
In many states throughout the U.S., the process of obtaining an electrician license requires securing an electrical contractor bond. An electrical contractor bond is a form of contractor bond. It provides some protections to the state licensing authority as well as the contractor’s customers that work will be performed as agreed upon and in line with current regulations and laws.
An electrical contractor bond works like many other surety bonds. There is an obligee, which is the state or local authority requiring the bond, the principal, which is the electrician who must post the bond, and the surety providing the bond. If something goes wrong during a contractual agreement with the electrician, a customer can make a claim for financial losses and damages against the bond. The surety initially pays the cost of legitimate claims, but the licensed electrician is ultimately responsible for repaying the claim amount.
What Does an Electrical Contractor Bond Cost?
As with other contractor bonds, an electrical contractor bond is priced as a percentage of the total bond amount required by the licensing authority. This percentage can range from 1 to 5% for most licensed electricians. As an example, a $10,000 bond with a rate of 3% costs you $300.
When applying for an electrical contractor bond, the surety agency will review your personal credit history and score, as well as details of your business finances. If you don’t have great credit or haven’t been in business long, you can still get an electrical contractor bond. However, the percentage rate you pay will be higher than for someone with excellent credit.
How to Obtain an Electrical Contractor Bond
You can start the process of obtaining the electrical contractor bond you need by submitting a request for a free quote through our short online form.
There are several types of insurance coverages that are recommended for contractors, but the recommended coverage will vary based on your operation.
If you’d like to learn more about all of the insurance coverages available to you, please read our contractor insurance guide.
Frequently Asked Questions
The cost is usually 1 – 10% of the bond amount. Keep in mind that pricing varies based on the bond amount, and your financial strength.
Apply and get approved on our website, sign the surety agreements, and we will ship the bond out. If you would like to learn more about what surety bonds are and how they work, you can read our detailed guide here.
Yes, it’s possible, but bad credit usually results in higher rates.
Yes. We provide the lowest rates possible as a result of the large volume of bonds we write.
You must contact us immediately, as we have a team of claim specialists here to find a resolution for you. Keep in mind, it is crucial that you work with an expert in the surety industry. Learn more about how to ensure you choose the proper bond company.
You can take a look at our full list of license and permit bonds.