Oklahoma 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 Oklahoma 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?

An Oklahoma contractor license bond is a way to protect the licensing authority, project owners, and the public against the financial fallout from a licensed contractor’s lack of regulatory compliance, malfeasance, or other unlawful or unethical business practices. In the event of such a loss, the injured party can file a claim against the bond and receive monetary damages.

 

Who Needs One?

In Oklahoma, plumbing, electrical, and mechanical contractors must be licensed by the State of Oklahoma Construction Industries Board. Purchasing a $5,000 contractor license bond is a prerequisite for licensing. 

Some Oklahoma municipalities require local licensing of construction contractors, which may also involve furnishing the licensing authority with a contractor license bond. 

How Does a Contractor License Bond Work?

An Oklahoma contractor license bond is a legally binding agreement involving the local licensing authority (the “obligee”), the contractor seeking a license or permit (the “principal”), and the “surety” guaranteeing the bond. That guarantee takes the form of agreeing to pay a valid claim initially and giving the principal some time to repay the resulting debt to the surety. A principal who does not repay that debt is likely to be sued by the surety to recover the funds.

How Much Does It Cost?

The surety sets the required bond amount, while the surety assigns each bond applicant a premium rate through underwriting. Multiplying these two figures yields the bond’s annual premium cost. 

The primary underwriting concern is the risk of the principal not repaying the surety for claims paid on behalf of the principal. The best measure of that risk is the principal’s personal credit score. 

A high credit score is a reliable indication of a low-risk level for the surety. Low-risk results in a low premium rate. On the other hand, a low credit score means the risk to the surety is higher, so the premium rate will also be higher. 

The premium rate for a well-qualified principal usually is in the range of 1% to 3%.

At Surety Bonds Agent, we offer a full range of surety bonds nationwide through an extended carrier network. Continue below to learn more about Oklahoma 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?

An Oklahoma contractor license bond is a way to protect the licensing authority, project owners, and the public against the financial fallout from a licensed contractor’s lack of regulatory compliance, malfeasance, or other unlawful or unethical business practices. In the event of such a loss, the injured party can file a claim against the bond and receive monetary damages.

 

In Oklahoma, plumbing, electrical, and mechanical contractors must be licensed by the State of Oklahoma Construction Industries Board. Purchasing a $5,000 contractor license bond is a prerequisite for licensing. 

Some Oklahoma municipalities require local licensing of construction contractors, which may also involve furnishing the licensing authority with a contractor license bond.

An Oklahoma contractor license bond is a legally binding agreement involving the local licensing authority (the “obligee”), the contractor seeking a license or permit (the “principal”), and the “surety” guaranteeing the bond. That guarantee takes the form of agreeing to pay a valid claim initially and giving the principal some time to repay the resulting debt to the surety. A principal who does not repay that debt is likely to be sued by the surety to recover the funds.

The surety sets the required bond amount, while the surety assigns each bond applicant a premium rate through underwriting. Multiplying these two figures yields the bond’s annual premium cost. 

The primary underwriting concern is the risk of the principal not repaying the surety for claims paid on behalf of the principal. The best measure of that risk is the principal’s personal credit score. 

A high credit score is a reliable indication of a low-risk level for the surety. Low-risk results in a low premium rate. On the other hand, a low credit score means the risk to the surety is higher, so the premium rate will also be higher. 

The premium rate for a well-qualified principal usually is in the range of 1% to 3%. 

 

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Request a quote online or call today to speak with one of our surety bond experts about obtaining an Oklahoma contractor license bond.