All contractors in Galveston, Texas have to purchase a surety bond before they can be issued a license to legally take on jobs in the city.
In this short post you'll learn:
- What a contractor surety bond is
- How much this surety bond costs
- How to manage your bond to keep you license up to date
If you found this post and you already understand contractor license surety bonds, you can get pricing for your bond right here.
What is the Galveston Texas Contractor License Bond?
As the Galveston Building Division states on their website, they are "committed to ensuring the safety, health, and general welfare of our building environment. Through fair and efficient code enforcement..."
That statement is exactly why the City of Galveston requires all contractors getting licensed in the city to purchase a $25,000 surety bond before a license can be issued.
A surety bond is a legal contract you purchase as a guarantee you will not commit fraud against your customers, primarily:
- Follow all building codes and laws for contracting in the city
- Conduct all customer projects according to the contract and with good business practices
Think of it like this...
The City of Galveston would probably love to have inspectors look over every job you complete and talk to every customer you have, but that is not possible.
The contractor surety bond is the next best thing. It's just a guarantee that you will follow through on your promises as a licensed contractor.
What are the City of Galveston Contractor Bond Requirements?
City Contractor License Surety Bond
Galveston makes this easy and requires all contractor licenses - except HVAC contractors - to purchase a $25,000 surety bond.
The $25,000 can be thought of as coverage, but it's actually the maximum penalty.
The City of Galveston website does mention $25,000 is a minimum amount. This indicates that if a contractor is applying to re-instate a license after being reprimanded, the city may require a larger bond amount before issuing a license.
If a contractor is guilty of committing fraud, any single or in the case of multiple claims against them is maxed out at the $25,000 amount.
When a surety bond pays out to a harmed customer, the contractor is responsible for paying the amount of the claim back to the insurance company that underwrote their bond. That is what it's a penalty and not really coverage.
Right of Way Construction Bonds
When construction work needs to be completed on public property, the city will go through a bid process to hire a construction firm.
If hired, this construction firm will be required to obtain a construction or performance surety bond.
The amount will vary based on the project and the type of project. For example a utility project has a bond amount of 100 X the proposed linear feet of utility.
So if the proposed buried line is 500 then the bond amount will be 500 X 100 or $50,000.
Again each project will have a varying bond amount for that specific project.
Private Construction Bonds
A privately funded construction project will always require the contractors involved to purchase a performance bond.
This is just like the right of way surety bonds for the city. The bond amount will be equal to the winning bid amount or any adjusted project amount.
Learn more about performance bonds and related construction bonds like bid bonds, maintenance bonds, and payment bonds.
How Much Does a City of Galveston Contractor Bond Cost?
The great news for this surety bond requirement is we have already secured a low fixed price of $250, or 1%. This is one payment for a 12 month period.
| Bond Type | Bond Amount & Price | Click Here to Buy |
|---|---|---|
| Galveston Texas Contractor Bond | $25,000 x 1% = $250 per year | Purchase for $250 |
Construction surety bonds are almost always going to be 3% of the project amount after you've been approved through a personal credit check of all business owners.
The personal credit of the owners is the only real metric of reliability the surety has to judge applicants on.
Once initially approved, you can secure a lower rate than 3% if you have a portfolio of other successful completed projects with similar values.
How Long Do You Have to Keep This Contractor Bond?
As long as you remain licensed in the City of Galveston, you must have an active surety bond on file with your license.
The good news is once you purchase and file your surety bond with your license application, you only have to pay the renewal premium of $250 each year and your initial bond will remain active. You won't have to file any new paperwork.
How Do You Purchase Your City of Galveston Contractor Surety Bond?
The process is very fast and easy.
We are Surety Bonds Direct, a surety agency. We have a network of sureties so we can price shop and find the lowest possible price for our clients.
This is why we can offer you the low price of $250 with no credit check required.
Just fill out our quote request form.
Once you specify your city as Galveston, a bond specialist will be able to help you immediately complete your purchase.
Whether you purchase using our online order form or over the phone with your bond specialist, we can have your bond prepared and issued to you in one business day.
As your renewal date approaches, your bond specialist will contact you 30 to 40 days in advance to remind you of the bond expiration and to help you renew it.
If you're getting licensed in other Texas cities, click below and learn about their bonding requirements:
- City of Forth Worth right of way bonds
- City of El Paso contractor bond requirements
- City of San Antonio contractor bond requirements
- City of Amarillo contractor bond requirements
What Other Types of Insurance Do You Need?
The City of Galveston also requires contractors to purchase general liability insurance in the following minimum amounts:
- Minimum liability insurance policy of $300,000
- Per occurrence - $300,000
- Annual aggregate - $300,000
- Bodily injury - $100,000
- Property damage - $100,000
Learn more about the difference between a contractor bond vs. contractor insurance, but the short of it is the bond you purchase for your customers protection and traditional insurance you purchase for your protection.
When You're Ready To Get You're Surety Bond We're Ready to Help
I hope you understand the surety bond requirement.
Remember, it's a tool used by the City of Amarillo to keep you and all licensed contractors accountable to the laws in the city and state, and your customers.
If you're ready to purchase your City of Amarillo contractor surety bond today, click here and fill out our quote form. Just tell us which license classification you're getting.
You can also call a bond specialist at 1-800-608-9950 and they will help you get pricing over the phone.
