Getting licensed as a contractor in Abilene is a straightforward process. In fact, the Department of Building Inspections doesn't even require application fees. There are very few government licensing agencies that don't collect fees.
However, they do have a few requirements that may be completely new to you if this is your first time getting licensed.
This short post will clarify the requirements so you can get the licensing process done fast.
What is the Abilene Contractor Surety Bond Requirement?
If this is the first time getting licensed as a contractor, you may have never heard of surety bonds before. And it's not uncommon to confuse a surety bond's purpose with general liability insurance.
Licensing agencies require a contractor license surety bond for a lot of different occupational licenses they issue, not just contractors.
This surety bond is a legal contract that ensures you won't commit fraud against your customers by following the laws and codes that regulate the contracting industry in the state and in Abilene.
You can think of it like insurance you purchase for the protection of your customers.
Abilene's Building Inspection Division can't monitor and inspect every single job contractors in the city are completing for their clients. So they use the surety bond as the tool to hold every licensed contractor accountable.
What Are The Abilene Contractor Bond Amounts?
Not all contractor license types are required to purchase a surety bond.
The amount of each bond is the maximum amount of compensation available to a single customer or multiple customers in the event of multiple claims.
When you purchase your Texas contractor license bond, like traditional insurance, you'll pay a small percentage of the bond amount you need.
| License Qualification | Bond Amount |
|---|---|
| Building Contractor | $75,000 |
| Roofing Contractor | $75,000 |
| Demolition Contractor | $75,000 |
| Building Moving Contractor | $75,000 |
| Electrical Contractor | No Bond Required |
| Mechanical Contractor | No Bond Required |
| Plumbing Contractor | No Bond Required |
| Swimming Pool Contractor | $10,000 |
| Irrigation Contractor | $5,000 |
| Sign Contractor | $3,000 |
If you're a building contractor with the $75,000 bond, you do not need to get the $3,000 bond to get licensed as a sign contractor.
When there is a legitimate and successful claim against a contractor, the surety will guarantee that claim amount and pay it to the customer.
The surety is the commercial insurance company that underwrote the surety bond.
The contractor will likely have their license suspended and will have to pay back the surety the amount of the claim before they apply to have their license reinstated.
As you can see, the contractor surety bond is a tool of accountability for the contractor and protection for the customer.
How Much Will Your Abilene Contractor Bond Cost?
As we mentioned, surety bonds are written by an insurance company that chooses to offer contractor surety bonds.
These companies assess an applicant and quote a rate. This rate multiplied by your bond amount will be the price you pay.
To assess each applicant, the surety will look at these three primary factors:
- The personal credit of the business owner or owners
- Any prior industry experience
- Any prior bonding history if an owner has been licensed in the past
It's crazy because every surety is different and will quote a different rate. Some of these rates will be 2 to 3 percentage points different and that can mean hundreds of dollars you can save.
How Can You Save Money Buying Your Texas Contractor Surety Bond?
We are Surety Bonds Direct, a surety agency and we work with a network of A-rated sureties to find our clients the lowest possible price. Plus we'll manage our clients' bonds over the years they need them.
For every Abilene contractor bond, we have secured a low fixed price that does not require a credit check. This means you can purchase your bond today and have it issued in less than one business day.
For the $75,000 bond we can get you immediate pricing for $375 per year. But we can likely get you even lower pricing if you know you have good credit.
For the lower bond amounts, you can expect to pay $100 in nearly every case.
How Long Does Your Abilene Surety Bond Last?
The Building Inspections Division requires an active surety bond for as long as you remain actively licensed in the city.
Every year you will have to renew your bond by paying the renewal premium. This premium is likely going to remain the same from year to year unless you've suffered a claim or the City of Abilene decides to increase the bond amounts.
We make renewing your bond easy. Your bond specialist will contact you 30 to 40 days in advance of your bond's expiration date to help you get it renewed quickly.
Once you pay your renewal premium the initial bond you filed with your license application remains active. You will not have to submit another bond to the Building Inspections Division.
What Are The General Liability Requirements?
General liability insurance for contractors is required to ensure a contractor's business can't be suddenly shut down because of incidental injury or property damage on a customer's property.
The minimum amount of coverage is $300,000 per occurrence for the following license types:
- Electrical contractors
- Plumbing contractors
- Swimming pool contractors
- Irrigation contractors
- Sign contractors
The actual amount of liability insurance you should choose will depend on your business.
Just to be clear, a contractor surety bond vs liability insurance comes down to their purpose. The surety bond is purchased by you for the protection of your customers. Liability insurance is also purchased by you but to protect your business from accidental injury or property damage.
Other Licensing Abilene Contractor Licensing Requirements
There are a few other licensing requirements based on the type of license you're getting. Each of the following licenses must have their corresponding state issued license:
- Electrical contractors
- Mechanical contractors
- Plumbing contractors
- Irrigation contractors
- Sign contractors
When You're Ready To Get Your Abilene Contractor Bond We're Ready To Help
We 're ready to get your surety bond done, we're ready to help you.
All you have to do is submit a quote for your license type and you'll immediately see your price. If you have excellent credit, call a bond specialist (1-800-608-9950) and we'll try hard to get you an even lower price.
If you have questions please call us. We're here to make this process easy and earn your business.
