Construction companies in Oklahoma need a contractor bond when licensing rules require a surety-backed obligation. Surety Bonds Agent helps clarify the process and support your quote request. Start your application online.
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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.
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%.
We proudly serve all 50 states, offering a full range of surety bonds. To buy surety bonds online:
There’s no obligation, and we can often help you get bonded in 24 hours or less.
Select the bond you need — commercial, contract, or any specialized bond. We help you find exactly what is required in your state.
Complete a short online form. It only takes a few minutes, with no extra paperwork or long verification steps.
Get fast approval and receive your bond instantly by email. Your document is ready to use right away.
Simply fill out our convenient online application form to get started.
We work with a wide range of carriers to provide many options to our clients.
As an independent agency, we can leverage our carrier network to find the most competitive rates for the bonds you need.
We work to get you bonded as quickly as possible, often in 24 hours or less.
Our experienced surety bond agents provide personalized assistance to help you understand your bonding requirements and options.
Request an online quote today! Or speak with one of our knowledgeable surety bond agents about the commercial bonds you are interested in.
