In Ohio, only specialty (HVAC, plumbing, electrical) contractors are licensed at the state level, and there is no bonding requirement. General contractors and home improvement contractors working in some jurisdictions may need to obtain a local license, and in some cases, that may include purchasing a contractor license surety bond.
Ohio Contractor Licensing Bond
Electricians, roofers, and builders in Ohio may need a contractor license bond for local licensing compliance. Surety Bonds Agent helps match your bond request to the right requirement. Request a quick quote now.
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What Is a Contractor License Bond?
In the instances in which an Ohio contractor license bond is required, the aim is to protect the licensing authority, project owners, and the public against the financial harm caused by a licensed contractor’s unlawful or unethical actions. When a loss occurs due to a licensed contractor’s regulatory noncompliance, carelessness, or malfeasance, the injured party can file a claim against the contractor’s license bond and be compensated for damages.
Who Needs One?
How Does a Contractor License Bond Work?
There are three parties to an Ohio contractor license bond: the local licensing authority (the “obligee”), the contractor (the “principal”), and the bond’s guarantor (the “surety”).
Upon receipt of a claim, the surety determines whether it is valid. The legal obligation for paying valid claims belongs entirely to the principal.
However, having guaranteed the bond, the surety will pay it initially on behalf of the principal and establishes the terms for the principal to repay the resulting debt. Failing to repay the surety may result in the surety suing the principal to recover the funds.
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How Much Does It Cost?
The annual premium for an Ohio contractor license bond is calculated by multiplying the required bond amount (set by the obligee) and the premium rate (assigned by the surety). The required bond amount, or “penal sum,” is the maximum that will be paid out on a claim. The premium rate reflects the risk of the surety not being repaid for claims paid on the principal’s behalf. That risk is measured in terms of the principal’s personal credit score.
There is an inverse relationship between credit score and risk level. A high credit score suggests a low risk to the surety, while a low credit score means the risk to the surety is high. Low risk earns the principal a low credit score, while high risk warrants a high premium rate.
The premium rate for a well-qualified principal usually is in the range of 1% to 3%.
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How Do Ohio Contractor License Bonds Work?
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Choose Your Bond Type
Select the bond you need — commercial, contract, or any specialized bond. We help you find exactly what is required in your state.
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Submit a Quick Application
Complete a short online form. It only takes a few minutes, with no extra paperwork or long verification steps.
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Get Approved & Receive Your Bond
Get fast approval and receive your bond instantly by email. Your document is ready to use right away.
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