Hawaii Contractor License Bond

Hawaii requires certain construction contractors to obtain and keep in place a license to perform residential or commercial construction projects. Contractors may also need to get a surety bond as part of their licensing requirements. This surety bond, known as a Hawaii contractor license bond, is crucial to comply with state laws.

A Hawaii contractor license bond is a form of protection for customers, vendors, and other parties that conduct business with a licensed contractor. Should work not be performed as promised or a payment not be made, a claim can be made against a Hawaii contractor license bond to offset financial damages.

A contractor license bond is a contractual agreement made between three parties—the obligee, the principal, and the surety.

The Obligee

The obligee is the state organization in the agreement that requires the contractor to obtain a bond during the licensing process. In Hawaii, the Contractors License Board is the obligee that receives peace of mind through the bond because the bond pushes the contractor to abide by state laws.

The Principal

The principal in the agreement is the contractor who must obtain the bond to become licensed in the state. The bond protects the customers of the contractor.

The Surety

The surety company gives the bond to the contractor and pays any claims that get filed against the bond. The contractor must then repay the claims over time to the surety.

The obligee of Hawaii contractor license bonds is as follows:

Contractors License Board

DCCA, PVL Licensing Branch

PO Box 3469

Honolulu, Hawaii 96801

Phone: 801-586-3000

Not every licensed contractor in Hawaii must secure a Hawaii contractor license bond. Unlike other states with similar licensing rules, Hawaii examines a contractor's need for a bond on a case-by-case basis.

For those who perform residential or commercial work on construction projects, checking with the licensing authority in Hawaii is essential to determine if a Hawaii contractor license is required or not.

After determining the amount of bond you need, submit a brief online application to start the process of securing a Hawaii contractor license bond. The process is simple and straightforward, and you can receive a quote for your bond premium quickly.

Two main factors play a part in determining the cost of a Hawaii contractor license bond. The first is the amount of the bond required by the Contractors License Board. The minimum bond amount for a licensed contractor in Hawaii is $5,000, but a higher bond may be necessary depending on the type of work a contractor plans to perform.

The contractor does not pay the full amount of the bond required, but instead, pays a fraction of this total, known as the bond premium. The bond premium is calculated as a percentage of the bond amount, typically ranging from 1 to 10 percent.

The surety company offering a Hawaii contractor license bond determines the bond premium by evaluating a contractor's credit history and track record with previous contractor bonds, if any.

Having a bad credit history won’t disqualify you from getting a contractor license bond, but a lower credit score will result in a higher bond premium. Alternatively, a strong credit history can lower the total out-of-pocket cost for a Hawaii contractor license bond.

You must renew your contractor license bond at the same time as your contractor license every two years. The deadline for renewal is on September 30 on even-numbered years, and in order to avoid missing the deadline, you should send in your renewal application by August 15.