Oregon 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 Oregon 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 Oregon contractor license bond is a surety bond designed to provide a certain level of financial protection for the customers of a licensed contractor.

 

Who Needs One?

In Oregon, both general and specialty contractors must be licensed by the Oregon Construction Contractors Board. Separate licenses are required for residential and commercial contracting. Purchasing the appropriate Oregon contractor license bond is a requirement for licensure. Contractors licensed for both residential and commercial work must purchase both a residential and a commercial license bond.

The bond amount differs depending on the type of license. Residential general contractors, for example, must provide a bond with a face amount of $20,000, while the highest bond amount for general commercial contractors is $75,000.

How Does a Contractor License Bond Work?

An Oregon contractor license bond is a legally binding contract among three parties:

  • The “obligee” requiring the bond is the Oregon Construction Contractors Board.
  • The “principal” purchasing the bond is the contractor.
  • The “surety” is the party guaranteeing the bond.

Any unlawful or unethical conduct by the principal that violates the terms of the bond and causes the project owner a financial loss is grounds for a claim for damages. The process begins with the injured party lodging a complaint against the principal with the obligee. If the obligee finds against the principal, the principal will be required to pay the claim.

As the bond’s guarantor, the surety will pay the claim on the principal’s behalf if the principal cannot or does not pay it promptly. But the obligation to pay valid claims still belongs to the principal, not the surety. Therefore, the principal must repay the debt to the surety. Failing to do so can result in the surety taking legal action against the principal to recover the funds.

How Much Does It Cost?

The annual premium rate for an Oregon contractor license bond is set by the surety through an underwriting assessment of the risk to the surety—specifically, the risk of not being repaid for claims paid on behalf of the principal. The underwriters use the principal’s personal credit score as a measure of risk. The higher the credit score, the lower the risk to the surety is assumed to be, and the lower the premium rate. Conversely, a low credit score indicates a higher risk level and warrants a higher premium rate. The premium rate for a well qualified principal typically is in the 1% to 3% range.

At Surety Bonds Agent, we offer a full range of surety bonds nationwide through an extended carrier network. Continue below to learn more about Oregon 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 Oregon contractor license bond is a surety bond designed to provide a certain level of financial protection for the customers of a licensed contractor.

 

In Oregon, both general and specialty contractors must be licensed by the Oregon Construction Contractors Board. Separate licenses are required for residential and commercial contracting. Purchasing the appropriate Oregon contractor license bond is a requirement for licensure. Contractors licensed for both residential and commercial work must purchase both a residential and a commercial license bond.

The bond amount differs depending on the type of license. Residential general contractors, for example, must provide a bond with a face amount of $20,000, while the highest bond amount for general commercial contractors is $75,000.

In Oregon, both general and specialty contractors must be licensed by the Oregon Construction Contractors Board. Separate licenses are required for residential and commercial contracting. Purchasing the appropriate Oregon contractor license bond is a requirement for licensure. Contractors licensed for both residential and commercial work must purchase both a residential and a commercial license bond.

The bond amount differs depending on the type of license. Residential general contractors, for example, must provide a bond with a face amount of $20,000, while the highest bond amount for general commercial contractors is $75,000.

The annual premium rate for an Oregon contractor license bond is set by the surety through an underwriting assessment of the risk to the surety—specifically, the risk of not being repaid for claims paid on behalf of the principal. The underwriters use the principal’s personal credit score as a measure of risk. The higher the credit score, the lower the risk to the surety is assumed to be, and the lower the premium rate. Conversely, a low credit score indicates a higher risk level and warrants a higher premium rate. The premium rate for a well qualified principal typically is in the 1% to 3% range.

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