Ohio Contractor License Bond

There is no statewide licensing requirement for contractors working in Ohio, but many counties and cities throughout the state have their own rules and regulations. Contractors in either residential or commercial lines of work may need a contractor license and a Ohio contractor license bond to work legally.

An Ohio contractor license bond is a type of surety bond that offers security to customers of contractors. This bond ensures that compensation will be paid if a customer suffers financial losses due to a contractor’s negligence or fraudulent activities on a project.

An Ohio contractor license bond is provided by a surety company, and claims are paid on the contractor’s behalf. Any successful claims must be repaid by the contractor, making it essential to keep claims to a minimum when possible.

An Ohio contractor license bond is a three-party contractual relationship.

The Obligee

The obligee in the relationship is the state or local licensing authority that requires the bond be posted by the contractor.

The Principal

The principal in the relationship is the contractor required to secure the bond to get licensed and legally work in the state.

The Surety

The surety company gives the bond to the contractor, and if a successful claim is made by a customer, then the surety company pays the claim. The contractor must then repay the claim to the surety.

Contractors working in Ohio receive licensing guidelines and requirements from local authorities. The obligee of an Ohio contractor license bond is the city or county office responsible for issuing licensing and mandating surety bonds.

Commercial contractors who work in certain fields may be required to get an Ohio contractor license bond to comply with state laws. In these cases, the Ohio Construction Industry Licensing Board, operating under the state’s Department of Commerce, acts as the obligee for contractor bonds.

The obligee information for commercial contractors in Ohio is as follows:

Ohio Construction Industry Licensing Board

6606 Tussing Road

Reynoldsburg, Ohio 43068

Phone: 614-644-3493

Each jurisdiction varies in terms of which contractors must get licensed or secure an Ohio contractor license bond. On the state level, contractors who work in the following areas of expertise on a commercial level are required to have a valid license and a license bond in order to work legally:

• Electrical contractors
• HVAC contractors
• Hydronics contractors
• Plumbing contractors
• Refrigeration contractors

Obtaining an Ohio contractor license bond is a straightforward process that starts with applying through a brief online form. The surety company reviews your application details to determine your approval and bond premium and you can complete the bonding process once this premium is paid.

Each county or city requiring a licensed contractor to post a bond has its own requirements for how much of a bond is necessary. The total bond amount needed can range from $5,000 up to $25,000 in many areas of Ohio, but contractors are not responsible for paying this entire amount.

The surety company determines the bond premium, or percentage of the total bond amount, that a contractor must pay to post a bond. An Ohio contractor license bond premium varies from one person to the next because rates are based on personal credit score and business financial standing.

A low credit score does not necessarily mean you cannot obtain an Ohio contractor license bond; it does mean, however, the bond premium you pay is higher compared to a contractor with a strong credit score.

Because contractor licenses are issued by various local agencies, there is no set expiration date or renewal term.

If an Ohio contractor license bond is required, then the expiration date is often the same as that of the contractor’s license. When it comes time for renewal, the surety company that issued your Ohio contractor license bond sends information about the process.