A Charlotte contractor bond guarantees that you, as a general contractor, will operate your business in full compliance with local and state rules and regulations according to your specific contractor license.
Understanding Charlotte Contractor Bonds
In Charlotte, a contractor bond is not the same as a bid or performance bond. Instead, this is the bond that you get when you want to advertise yourself as licensed and bonded. Contractor bonds tell potential clients and customers that you’re able and willing to follow the rules and do a good job. If not, a project owner can file a claim against you.
Contractor bonds serve two main purposes. They act as your guarantee that you will comply with state and local regulations as they pertain to your license. These bonds also protect the public from dishonest contractors and their fraudulent practices. All public projects require that contractors have a contractor bond, as do many private companies.
Common Types of Contractor Bonds
You can obtain a contractor bond for your specific contractor’s license. The most common contractor bonds in Charlotte include:
- Local contractor bond
- State contractor bond
- General contractor bond
- Plumbing contractor bond
- Electrical contractor bond
How Much Does a Contractor Bond Cost
Like all bonds, your annual premium will be a percentage of the total bond amount. How much you pay will be determined by your personal credit score. If you have excellent credit, you can expect to pay between one and three percent of the bond amount. For contractors with poor credit history or a low score, you may pay as much as five to 15 percent.
If you’re planning to work in multiple states, in North Carolina and South Carolina or elsewhere, you will need a separate bond for each state. Your Charlotte contractor bond does not cover you across state lines.
Contractor Bond Claims
If a customer or client believes you’ve done bad work or you’ve broken the rules, they can file a bond claim against you. The surety will investigate the claim, and if found to be valid, they will pay the claimant. You are legally required to repay the surety in full. As part of the bond agreement you pledge your personal and business assets against claims made.
When you get your contractor’s license or you want to work in and around Charlotte or anywhere in North Carolina, contact Charlotte Insurance. We can help you get all the contractor bonds you’ll need at the local and state level. Call us today for a free estimate.