West Virginia Contractor License Bond

In many states, contractors working in the construction industry must get a license to work on projects in accordance with the law. West Virginia does not have a statewide requirement for contractor licensing, but a handful of counties and cities may impose these rules.

When a contractor license is necessary, part of the licensing process may involve securing a West Virginia contractor license bond. As a type of surety bond, a West Virginia contractor license bond protects the licensing authority and the customers of a contractor when they perform construction projects.

This type of surety bond is not insurance for the contractor, but it provides customers with protection against financial losses should the work not be performed up to code.

A West Virginia contractor license bond functions as a three-party contractual agreement.

The Obligee

When a local licensing authority does require a West Virginia contractor license bond to be posted, that authority is known as the obligee of the bond.

The Principal

The contractor who must post the bond to get licensed is referred to as the principal of the bond.

The Surety

The surety company is the one that provides the bond to the principal and pays any claims on the front end. The contractor then repays the claims.

Because West Virginia does not have a statewide requirement for contractors to hold a license, there is no central licensing authority that mandates a bond to be in place.

In West Virginia, contractors are generally defined as individuals working on residential or commercial construction projects. This may include home remodeling or renovation, landscaping, electrical or plumbing work, roofers, or excavation.

A West Virginia contractor license bond may be required for anyone working in these fields of construction, but checking with your local licensing authority provides clarity on who is required to post a bond and secure a license.

To get started with the bonding process, contractors submit a bond quote request online or over the phone. The surety company evaluates the type of bond needed, the amount of the bond, and the contractor's credit history, and then provides a quote for the bond premium.

As with other surety bonds, a West Virginia contractor license bond is priced according to the bond amount required and the credit history of the contractor. Bond amounts vary depending on the local licensing authority requiring the bond.

Depending on the type of contractor work performed, a bond may be required in the amount of $5,000 or more, but licensed contractors do not pay this full amount. The surety company providing the bond calculates the bond premium paid by the contractor as a percentage of the total bond to be secured.

Bond premiums typically range from 1 to 10 percent of the bond amount. Contractors undergo a credit check as part of the bonding process, to see if they present a financial risk to the surety company.

When credit has been an issue in the recent past, a contractor can still obtain a bond, but they will pay a higher bond premium than someone who has a clean financial track record.

West Virginia contractor license bonds renew one to two years after they are secured. Your surety company will remind you when your bond is set to renew. You must renew your bond in a timely manner so that you don’t risk invalidating your bond.