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$50,000 Bond
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Who Is Required To Purchase a Virginia Contractor Contractor Bond
Virginia has the following three license classifications:
- Class A - No restrictions on how large a single contract or project can be.
- Class B - A single project has a minimum of $10,000 up to and not including $120,000
- Class C - A single project has a minimum of $1,000 up to and not including $10,000
Class A and Class B classifications have the following net-worth requirements:
- Class A - $45,000
- Class B - $15,000
To prove net-worth, you must provide a Financial Statement Form with supporting documentation, including a Certified Public Accountant review or audit.
If you're unable to meet the net-worth requirement or the time and cost of hiring a CPA is not worth it, you can purchase a surety bond (contractor license bond) in lieu of the net-worth licensing requirement.
The Virginia Department of Professional and Occupational Regulation (DPOR) currently set the contractor bond amount at $50,000.
Class C licenses have no net-worth requirement and no bonding requirement.
County or Municipal Bonding Requirements
Depending on where your project is located you may have to purchase a separate county or city contractor license bond or contract/construction bond.
Typically, you'll be notified of this bonding requirement when you go to pull permits for the project.
The amount of the bond will be told to you at that time. Each county and city will have their own requirements.
Examples of these counties and cities include:
- Arlington
- Chesapeake
- Fairfax Falls Church
- Hampton
- Lynchburg
- Martinsville
- Newport News
- Portsmouth
- Prince William
- Roanoke.
If this bond is for a job that you are bidding or a contract that has been awarded to you, the surety bond you need is a contract/construction bond rather than a Contractor License Bond.
Why is a Virginia Contractor Bond Required?
The Virginia DPOR requires contractors and contracting businesses to get licensed and conduct their business according to the rules, regulations, and laws in the state.
This license process ensures each contractor has:
- A minimum level of experience
- Obtained the necessary level of education
- The proper business records are submitted
- Selected the appropriate license type for the projects they want to bid on
One of these requirements is the net-worth requirement.
- Class A - $45,000
- Class B - $15,000
If a Class A or Class B contractor is unable to meet the net-worth requirement, the contractor must purchase a surety bond before their license can be issued.
A surety bond or Virginia contractor license bond will provide the appropriate protection to the customers of the licensed contractor.
What Does a Virginia Contractor License Bond Protect Against?
There will always be licensed contractors who try to purposefully cut corners to increase profits or even steal money.
These fraudulent actions of misconduct include:
- Breaking the terms of a construction project
- 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 $50,000 bond amount.
The DPOR deems contractors who meet the minimum net-worth requirement financially capable of handling these situations if they arise during the course of business.
How Much Does a Virginia Contractor Bond Cost?
The cost of the Virginia contractor license bond is based on a rate quoted by a surety.
A surety is an insurance company that underwrites the surety bond. And because a surety bond is similar to insurance, the surety will determine a rate based on their internal processes. However, all sureties will use similar factors such as:
- Primarily personal credit
- Contracting experience and industry experience
- Any prior bond claims if you've been licensed in the past
Because each surety will quote a unique rate, the final prices of the bond will vary. Specialized surety agencies like Surety Bonds Direct help customers save hundreds of dollars purchasing a Virginia contractor license bond.
We use our network of A rated sureties to price shop for you, collect the various rates, and find you the lowest possible price for your bond.
Here's a table showing you examples of pricing for $50,000 contractor bond.
| Bond Amount | Surety Bond Rate | Price You Pay |
|---|---|---|
| $50,000 | 0.5% | $250 |
| $50,000 | 1% | $500 |
| $50,000 | 2% | $1000 |
| $50,000 | 3% | $1,500 |
| $50,000 | 4% | $2,000 |
| $50,000 | 5% | $2,500 |
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.
County, City, or Local Government License Bonds
For local bonding requirements, you can instantly purchase your bond, for bond amounts up to $25,000.
Once you have the bond amount given to you by the county or city agency requiring the bond, the minimum price starts at $100.
The price is 1% of the bond amount.
Surety Bonds Directly allows you to enter your bond amount and instantly purchase your bond. After you purchase, the bond will be issued within 1 to 2 business days.
What Happens After You Purchase Your Bond?
After you purchase your bond, Surety Bonds Direct's issuing department will prepare your bond with the correct signatures, seals, and the required power of attorney.
Virginia allows us to email you a copy of the final bond so you can submit it with your application.
Renewing Your Contractor Bond
Virginia contractor license bonds expire one year from the active (effective) date of your bond.
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.
Eventually, when you meet the net-worth requirement, you no longer have to renew your surety bond. You can let it expire.
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 Virginia State Contractors Board.
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 Virginia State Contractors Board.
Contractor Bonds And Getting Your Virginia Business License/Registration
If you're applying for your first Virginia contractor license, read our post that outlines the 6 steps to getting your Virginia contractor license.
At a high level the steps are:
- Create a business registry or register a business name
- Outline business management
- Decide on license classification and specialty
- Meet the financial net-worth or surety bond requirement
- Complete necessary background forms
- Submit your completed application
Additional Virginia Contractor Bond Resources & Links
Pursuant to the Code of Virginia (§54.1-111(6)), it is unlawful to materially misrepresent facts in an application for licensure, certification, or registration. Violations are subject to criminal prosecution, which may result in a conviction along with a jail sentence or monetary fines.
Contractor’s licenses are issued for two year terms, expiring the same month in which the license was issued.
Pursuant to the Code of Virginia (§59.1-69), fictitious names or trade names must be registered in Virginia with either the State Corporation Commission or the Circuit Court of the locality within which the company plans to conduct business.
Licensed contractor businesses must maintain licenses as set forth in See Part V. Standard of Practice and Conduct of the Board for Contractors Regulations.