Idaho Contractor License Bonds

At Surety Bonds Agent, we offer a full range of surety bonds nationwide through an extended carrier network. Continue below to learn more about Idaho contractor license bonds. If you have additional questions or want to explore bonding solutions for your business, speak with one of our knowledgeable surety bond experts.

 

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What Is a Contractor License Bond?

When an Idaho contractor license bond is required, the purpose is to provide financial protection for project owners. This type of surety bond requires the contractor to operate in full compliance with the laws and standards of the State of Idaho.

 

Who Needs One?

Idaho does not require general contractors to be licensed at the state level. However, they must register with the Idaho Contractors Board to do business legally in the state. No license bond is required.

However, some specialty contractors, such as HVAC, public works, plumbing, fire protection, and construction manager contractors, must be licensed by the Division of Public Safety (DPS), which requires the purchase of a $2,000 contractor license bond. Some local jurisdictions also require a surety bond as a condition for obtaining a local license or permit.

How Does a Contractor License Bond Work?

An Idaho contractor license bond is a legally binding 3-way contract involving:

  • DPS, as the “obligee” requiring the bond,
  • The contractor, as the “principal” required to purchase the bond, and
  • The bond’s guarantor, as the “surety.”

Any unlawful or unethical action by the principal that causes a monetary loss to the project owner gives the project owner the right to file a claim against the bond. If the surety finds that the claim is legitimate, the principal is legally obligated to pay it, up to the full amount of the bond.

Unless the contractor is able to pay the claim immediately, the surety will pay it on the principal’s behalf. That’s because the surety has agreed to extend credit to the principal as a guarantee that any valid claim will be paid. The surety usually sends payment directly to the claimant. The principal must then repay that debt to the surety within a certain length of time or risk being sued for the return of the funds.

How Much Does It Cost?

The annual premium for an Idaho contractor license bond is a small percentage of the required bond amount. The exact percentage is determined through an underwriting process that considers the risk of the principal incurring claims and not repaying the surety for claims paid on the principal’s behalf. That determination is made largely on the basis of the principal’s personal credit score.

A high credit score is viewed as a sign that the risk to the surety is low. Consequently, the premium rate will be low as well, perhaps even lower than 1%. On the other hand, a low credit score suggests that the risk is higher, which usually results in a higher premium rate.

At Surety Bonds Agent, we offer a full range of surety bonds nationwide through an extended carrier network. Continue below to learn more about California contractor license bonds. If you have additional questions or want to explore bonding solutions for your business, speak with one of our knowledgeable surety bond experts.

 

CONTACT US FOR A

FREE CONSTRUCTION BOND QUOTE

What Is a Contractor License Bond?

When an Idaho contractor license bond is required, the purpose is to provide financial protection for project owners. This type of surety bond requires the contractor to operate in full compliance with the laws and standards of the State of Idaho.

 

Idaho does not require general contractors to be licensed at the state level. However, they must register with the Idaho Contractors Board to do business legally in the state. No license bond is required.

However, some specialty contractors, such as HVAC, public works, plumbing, fire protection, and construction manager contractors, must be licensed by the Division of Public Safety (DPS), which requires the purchase of a $2,000 contractor license bond. Some local jurisdictions also require a surety bond as a condition for obtaining a local license or permit.

An Idaho contractor license bond is a legally binding 3-way contract involving:

  • DPS, as the “obligee” requiring the bond,
  • The contractor, as the “principal” required to purchase the bond, and
  • The bond’s guarantor, as the “surety.”

Any unlawful or unethical action by the principal that causes a monetary loss to the project owner gives the project owner the right to file a claim against the bond. If the surety finds that the claim is legitimate, the principal is legally obligated to pay it, up to the full amount of the bond.

Unless the contractor is able to pay the claim immediately, the surety will pay it on the principal’s behalf. That’s because the surety has agreed to extend credit to the principal as a guarantee that any valid claim will be paid. The surety usually sends payment directly to the claimant. The principal must then repay that debt to the surety within a certain length of time or risk being sued for the return of the funds.

The annual premium for an Idaho contractor license bond is a small percentage of the required bond amount. The exact percentage is determined through an underwriting process that considers the risk of the principal incurring claims and not repaying the surety for claims paid on the principal’s behalf. That determination is made largely on the basis of the principal’s personal credit score.

A high credit score is viewed as a sign that the risk to the surety is low. Consequently, the premium rate will be low as well, perhaps even lower than 1%. On the other hand, a low credit score suggests that the risk is higher, which usually results in a higher premium rate.

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