Utah Contractor License Bond

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What is a Utah Contractor License Bond?

Several types of contractors in Utah must have a license before they can legally work with customers. A component of the licensing process involves securing a Utah contractor license bond. This surety bond works as a safeguard for the public.

If a contractor does not abide by state or local laws, building codes, or other regulations, then a claim can be made against the 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.

The bond is obtained through a surety company which covers valid bond claims, but the contractor is obligated to repay claims to the bond provider.

How Does a Utah Contractor License Bond Work?

A contractor license bond is a three-party agreement between an obligee, a principal, and a surety.

The Obligee

The obligee is the state or local organization that requires the contractor license bond with the hope that the bond will make the contractor abide by state and local laws.

The Principal

The principal is the contractor who must obtain the bond for the purpose of getting licensed as a working professional in the state.

The Surety

The surety company provides the bond to the contractor for a premium fee and then pays any claims that get filed by customers against the bond. The contractor must then repay the claim over time to the surety.

Obligee Details for Utah Contractor License Bond

Under current state laws, contractors in Utah are required to have a valid license to work on projects in the construction industry. With that license comes a requirement to secure a Utah contractor license bond, with the Utah Division of Occupational and Professional Licensing as the obligee.

The agency operates under the state’s Department of Commerce. The contact information for the obligee of these surety bonds is as follows:

Utah Division of Occupational and Professional Licensing

160 East 300 South, First Floor

Salt Lake City, Utah 84111

Phone: 801-530-6628

Who is Required to Get a Utah Contractor License Bond?

There are more than 30 classifications of contractors in Utah, each of which requires a license in order to legally perform work for customers. When a license is required, a Utah contractor license bond is also necessary. The most common contractor licenses issued in Utah that require a surety bond include:

  • General building contractor
  • Plumbing contractor
  • Electrical contractor
  • Elevator contractor
  • Mechanical contractor

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.

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. But this amount 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 one and 10 percent of the total bond amount posted.

Can I Get a Utah Contractor License Bond with Bad Credit?

If you have had court judgments against you, bankruptcy or foreclosure, or liens reported on your credit, you are considered a higher risk to the surety company than someone who has a clean credit history. You can still obtain a contractor license bond with bad credit, but you will pay more for your bond if your credit score is low.

Renewal Process for a Utah Contractor License Bond

Each Utah contractor license bond issued to accompany a contractor license has an annual renewal term, but no set expiration date is required to be listed on a Utah contractor license bond.

The renewal date is set for one year after the issue of the license. To comply with Utah contractor regulations, the surety company providing your contractor bond sends renewal instructions prior to the expiration date of the bond.

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Frequently Asked Questions

How much does a bond cost?

Pricing is a percentage of the contractor license bond amount that’s required of you, which is based on your personal credit. Use our bond pricing tool to to get a quick ballpark estimate.

Can I get bonded with bad credit?

Yes. You can apply and get bonded with bad credit. Our agency is the largest writer of bonds in the county, which allows us to approve contractors for bonds when other agencies cannot.

Are these the same as contract bonds?

No. Contractor license bonds ensure you will abide by the laws of your state, city or municipality when performing contracting work. Contract bonds guarantee public projects will be completed properly and are a separate bond type. You can learn more about contract surety bonds by visiting the contractor bond center.

Do I need a state or local bond?

It depends on who is requiring the bond of you, the local municipality, county or state. Depending on your location, it is possible you may need both a local and state bond, as contractor license bond requirements can vary drastically. You can select your state to see a full list of contractor license bond requirements.

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