North Carolina Contractor License Bonds

Get Your North Carolina Contractor Bond

Who Is Required To Purchase a North Carolina Contractor Contractor Bond?

North Carolina has three license limitations for general contractors:

• Limited
• Intermediate
• Unlimited

All of the limitation's financial requirement below are per job restrictions and exclude the cost of the land and any added costs to improve the land and prepare it for the construction project.

Limited License

This license can perform projects up to $750,000 and one of the following must be met:

• Current assets must exceed liabilities (working capital) by at least $17,000
• A total net worth of at least $80,000

Intermediate License

The Intermediate license can perform projects up to $1,500,00 in size and current assets must exceed total liabilities (working capital) by $75,000.

Unlimited License

As you would expect, the Unlimited license can perform projects of any size and the current assets must exceed total liabilities (working capital) by at least $150,000.

Proof of Working Capital

You have two options to satisfy the working capital requirement:

• Allow the Board to perform an audit
• Hire a licensed Certified Public Accountant to prepare an Agree-Upon Procedure Report

Why is a North Carolina Contractor Bond Required?

North Carolina requires a minimum net-worth to ensure the contractor is in good financial standing to perform projects of a given size and handle any emergencies or circumstances that arise during the project.

Contractors (and contracting businesses) that can meet these specific levels of working capital tend to be successful for the long term and as a result have very little complaints levied against them.

It's unfortunate, but over years of assessment, North Carolina has found that contractors who can't meet these working capital requirements are more likely to cut corners of purposely harm their customers to make more money on a project.

But just because a contractor can't meet the net-worth requirements doesn't mean they can't be a success and provide value to their community.

This is why the North Carolina Licensing Board for Contractors allows contractors to elect to purchase a surety bond so they can work in the limitation that will meet their business goals.

What Does a North Carolina Contractor License Bond Protect Against?

Through year over year assessments, the North Carolina Licensing Board for Contractors knows that even though all contractors are licensed, there will always be a handful of contractors who make poor decisions that harm their customers financially so they can increase profits.

A surety bond protects the customers of a contractor in cases where they are purposefully harmed because of the contractor's poor decisions.

These fraudulent actions of misconduct include:

• Breaking the terms of a construction project without
• Taking deposits or down payments and never starting or completing a project
• Replacing agreed upon materials with cheaper alternatives to increase profits
• Failing to pay subcontractors for completed work
• Failing to follow building codes and purposefully performing poor quality work

If a contractor is found guilty of any of these actions, a claim can be made against the contractor license bond for financial repayment. The limit of repayment is only up to the bond amount determined by the North Carolina Licensing Board for Contractors.

How Much Does a North Carolina Contractor License Bond Cost?

The cost of the North Carolina general contractor license bond is based on a rate quoted by a surety and the bond amount required.

A surety is an insurance company that underwrites the surety bond. The rate they charge is based on their own internal assessment, typically taking into consideration these three factors:

• Primarily personal credit
• Contracting experience and industry experience
• Any prior bond claims if you've been licensed in the past

Even though each surety uses these similar factors, the rates they quote will vary.

And because rates vary, the final prices will vary too. Surety agencies like Surety Bonds Direct help customers save hundreds of dollars purchasing a contractor surety bonds.

We use our network of A rated sureties to price shop for you and find you the lowest possible price.

Here Are The Bond Amounts In North Carolina

The North Carolina Licensing Board for Contractors determines the bond amount based on the history of claims in the state.

The follow are the bond amounts for each license limitation:

Example Bond Pricing

Let's use the Intermediate bond amount of $500,000 for pricing examples. The rates in the table range from really good to average.

But it's important to get your specific pricing and the process is easy to start.

Click here and start the online quote process. It takes 90 seconds to submit your request and we'll start pricing shopping for you.

If you prefer to speak with a bond specialist, you can call 1-800-608-9950.

Having a bond specialist secure pricing for you costs nothing and there's zero obligation to purchase the bond once you receive the pricing.

Other Contractor Bonding Requirements in North Carolina

Besides General Contractors, North Carolina requires some specialty contractors to get bonded.

The table below are some of the more common bonding requirements. The great news is you can instantly purchase these bonds today and have them issued, typically, within one business day.

Mecklenburg County Building Permit Bond

Mecklenburg county requires a building permit bond of $10,000.

Just like the landscape, home inspector, and irrigation contractor bonds, we sell this building permit bond for a flat price of $100.

You can instantly purchase your bond today and have it issued, typically, within one business day.

What Happens After You Purchase Your Bond?

After you purchase your bond, Surety Bonds Direct's issuing department will prepare your bond with the necessary signatures, notarized seals, and the required power of attorney.

North Carolina will accept a copy of the bond. This means we can email you the bond, making the process even faster.

You will have to print and sign the bond before you submit it to the Contractor's Board.

Renewing Your Contractor Bond

North Carolina general contractor license bonds expire one year from the active (effective) date of your bond.

For landscape, home inspector, and irrigation contractor bonds, you can choose the bond term that works best for your business goals.

No matter which bond you purchase, as your bond expiration approaches, your bond specialist will reach out to you 30 to 45 days in advance of your renewal date to make paying the renewal premium easy.

Once you pay the renewal premium, your bond remains active.

This Contractor License Bond is Continuous

A continuous bond means the original bond remains active as long as you pay the renewal premium.

Most of the time, you never have to worry about having a new bond issued or submitting the bond to the North Carolina Licensing Board for Contractors.

If we find you lower pricing, we'll get you that bond and in this case you will have to submit the new bond to the North Carolina Licensing Board for Contractors.

Contractor Bonds And Getting Your North Carolina Business License/Registration

If you're applying for your first North Carolina contractor license, read our post that outlines the steps getting your North Carolina general contractor license.

At a high level the steps are:

1. Choose your license classification
2. Determine your license limitation
3. Decide if a surety bond needs to be purchased
4. Purchase the required surety bond if necessary for the specialty license
5. Pass the required examination requirements
6. Meet the examination requirements
7. Submit to a criminal background check
8. Purchase the necessary business insurance

Remember, for general contractors, there is no statewide bonding requirement. However, purchasing a contractor license bond might help you hit your business goals faster if you can't immediately meet the required license limitation.

Additional North Carolina Contractor Bond Resources & Links

In lieu of demonstrating the level of working capital as required, an applicant for the North Carolina General Contracting License may obtain a surety bond. All surety bonds issued by Surety Bonds Direct meet the required state guidelines outlined below;

• Be provided by a surety authorized to transact surety business North Carolina.
• The surety provider shall maintain an AM Best rating of Superior (A++ or A+) or Excellent (A or A-)
• The bond is continuous and maintained for as long as the applicant maintains the license. If the bond is cancelled, the license will go invalid after 30 days unless an audit or a bond is submitted.
• List the State of North Carolina as the obligee.
• Be for the Benefit of any person who is damaged by an act or omission of the applicant constituting a breach
  of construction contract, breach of a contract for the furnishing of labor, materials, or professional services to
  be undertaken by the applicant, or by an unlawful act or omission of the applicant in the performance of a
  construction contract.
• Be for the following amounts based on limitation. Limited: $350,000, Intermediate: $1,000,000 or Unlimited: $2,000,000

NORTH CAROLINA LANDSCAPE CONTRACTORS' LICENSING SURETY COMPLIANCE BOND