Contractor License Bond

In general, every state requires that contractors have license bonds. Like many other commercial bonds, it is a guarantee provided for the consumer (or the individual who hired the contractor) so that the consumer will not have to bear the consequence from the wrongdoing of the contractor. It is a form of promise by the contractor to the consumers that the contracting company will adhere to its obligations and that its services comply as governed by the local and state laws.

 

Do not mistake the contractor license bonds as a form of insurance. It is not. Contractor license bond is a form of credit that protects the obligee (individual requiring the bond). Ultimately, the contractor is responsible for the payments in cases where claims are filed.