New Mexico Contractor License Bonds

Purchase Your New Mexico Contractor Bond Today

Who Is Required To Purchase a New Mexico Contractor License Bond?

New Mexico has dozens of contractor classifications fitting into four main categories:

• Housing and Construction
• General Construction
• Electrical
• Mechanical and Plumbing

Each main classification has a variety of sub-classifications, trades, or license focuses.

New Mexico is a unique state in that they require you to submit a Classification Determination Request form.

But regardless of your specific classification, all contractors are required to purchase a contractor license bond per license.

Why is a New Mexico Contractor Bond Required?

Like most states, New Mexico has a series of standards for obtaining a contractor license.

The licensing process not only brings uniformity to the contracting services in the state, but a license is required to legally provide services to customers.

New Mexico's licensing process ensures each contractors has:

• A minimum level of experience
• Obtained the necessary level of education
• Submitted proper business records
• Selected the appropriate license type for the projects they want to bid on

Part of this licensing process is the financial responsibility requirement, the surety bond requirement.

Obtaining a contractor license and license bond gives the New Mexico public confidence that you are a contracting expert they can trust to hire and get a project completed.

While a license bond is one type of bond you're required to purchase, there will likely be many more over the course of your career. These can include:

• Permit and/or right of way bonds
• Bid bonds
• Performance bonds
• Payment bonds

These contractor bonds are typically referred to as construction bonds because they are tied to one specific project.

What Does a New Mexico Contractor License Bond Protect Against?

Despite going through the licensing process and being approved by the New Mexico Regulation & Licensing Department, every year there will be a handful of contractors who purposefully commit fraud, financially harming their customers.

These fraudulent actions and acts misconduct include:

• Breaking the terms of a construction project
• Altering contract terms without the customers knowledge
• 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
• Neglecting 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, but only up to the $10,000 bond amount.

Compared to other states, contractor fraud is not as widespread, but the bond amount does affect the price to purchase your bond.

How Much Does a New Mexico Contractor Bond Cost?

Again, the bond amount in New Mexico is set at $10,000.

At a high level, the price to purchase this bond is based on a rate quoted by a surety.

A surety is the insurance company that underwrites contractor bonds. Every surety conducts their own assessment of an applicant using factors such as:

• The personal credit of the owner or owners
• Contracting experience and industry experience
• Any prior bond claims if you've been licensed in the past
• The current state of complaints against contractors as a whole

This rate multiplied by the $10,000 bond amount is the price you pay.

And this is why you should buy your surety bond with a specialized surety agency like Surety Bonds Direct.

As a surety agency, we only work with A rated sureties and have secured low fixed prices for your bond.

This means:

• No credit check
• No experience review
• No worries about past bond claims

You can purchase the $10,000 bond for $250.

If you would prefer to speak with bond specialist and get any questions you may have answered, call 1-800-608-9950.

What Happens After You Purchase Your Bond?

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

The New Mexico Regulation & Licensing Department allows you to submit a copy of the bond with your application packet.

This means we can email you a copy, speeding the process up. If you want the original bond for your records, we can mail it to you, but it's not required.

Renewing Your Contractor Bond

New Mexico has a three year license term and the bond term must match this license term.

As your bond expiration date 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.

The New Mexico Contractor License Bond is Continuous

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

You don't have to submit a new bond with the Department.

Contractor Bonds And Getting Your New Mexico Business License/Registration

For a more detailed and easy to follow licensing outline, read our post outlining the New Mexico contractor license process.

At a high level the steps are:

1. Outline your business structure
2. Purchase your surety bond (financial responsibility)
3. Have a criminal background check performed
4. Identify the Qualifying Party
5. Make sure the Qualifying Party meets all requirements
6. Submit your completed application