Know what the law says about bond regulations in your areas of operation
by Eric Weisbrot
October 22, 2018

The construction contracting business comes with an array of moving parts, not the least of which is operating in line with standards and regulations set forth by each state. Part of being in regulatory compliance involves securing surety bonds, meant to provide protection to customers from fraudulent or faulty work.

While most contractors recognize the need for licensing and bonding in the construction industry, it can be a challenge to understand the bond size requirements, as bonding thresholds are mandated by each state, not an overarching federal law.

The list below allows construction contractors to easily review the appropriate bond amount they must have in place in each state to operate legally.

  • Alabama—Construction contractors working in Alabama must have a general contractor license when the work performed exceeds $50,000. A construction contractor bond is also required, depending on where the jobsite is located, ranging from $2,500 to $10,000. The bond amount is dictated by city and county authorities, not the state as a whole.
  • Alaska—In Alaska, construction contractors must have a license to perform work when the value of the job is more than $10,000. A construction bond requirement is also in place—typically for $25,000. For contractors who work on residential projects only, a $20,000 bond is required for jobs valued at more than $10,000, and a $5,000 bond is required for projects valued at less than the $10,000 threshold.
  • Arizona—Licensing and bonding requirements for general contractors working in Arizona vary greatly, but all are dependent on the dollar value of the work completed for the customer. Total amounts range from $9,000 to $100,000, but contractors only pay a percentage of the total bond requirement when securing the bond.
  • Arkansas—For contractors in Arkansas, there are a myriad of licenses available and required, based on the type of work being performed. However, all general contractors must have a bond of at least $10,000 in place.
  • California—General contractors in California must secure a contractor license when work performed exceeds $500 in value. For nearly all contractors, a bond of at least $15,000 is required to operate legally, with the potential for an additional $12,500 bond requirement for certain projects.
  • Colorado—General contractors in Colorado must get the appropriate licensing and bonding information directly from the municipality or county in which they work, as requirements are not set at the state level.
  • Connecticut—The requirements for general contractors in Connecticut vary from city to city, as licensing regulation and bond minimums are set at this level.
  • Delaware—Any general contractor operating in the state of Delaware must have a contractor license if the work performed for customers exceeds $50,000. Nonresidential contractors, who work solely on commercial projects, must also secure a surety bond equal to 6 percent of the project’s value.
  • District of Columbia—General contractors operating a business in the District of Columbia must have a license, regardless of the type of work performed. Surety bonds are also required, but the amounts vary depending on the project.
  • Florida—There are two divisions of general contractors operating in the state of Florida: Division I and Division II. Licensing requirements are linked to these categories, and as such, they vary. However, any general contractor who falls into the Division I category must have a bond of no less than $20,000, while Division II contractors must have a bond of no less than $10,000 in place.
  • Georgia—General contractors providing work valued over $2,500 must have a license in the state of Georgia, along with a bond of at least $25,000, regardless of the type of work performed.
  • Hawaii—In Hawaii, general contractors are required to hold a valid license to operate and to secure a bond of no less than $5,000.
  • Idaho—Similar to other states, general contractors in Idaho must go to the city or municipality in which they plan to perform work to receive accurate licensing and bonding requirements.
  • Illinois—Any general contractor in Illinois is likely to need both a valid contractor license and a surety bond. However, these requirements are set by city and county guidelines, not the state as a whole.
  • Indiana—General contractors in Indiana also follow city and municipality regulations for licensing and bond requirements, for both commercial and residential work.
  • Iowa—A general contractor operating in Iowa must be licensed to do so when it earns more than $2,000 in any given year. Additionally, a bond of at least $5,000 is required for any licensed general contractor.
  • Kansas—Licensing and bonding requirements in Kansas are regulated by each city or county, so amounts vary from place to place.
  • Kentucky—General contractors in Kentucky must go to the city or municipality in which they intend to work to get clarification on licensing and bonding requirements.
  • Louisiana—Any general contractor working in the state of Louisiana must be licensed when work performed exceeds a value of $75,000 for residential projects and $50,000 for commercial jobs. A bond of at least $10,000 is also required.
  • Maine—General contractors in Maine have various license and bond requirements based on the city or municipality in which they perform work.
  • Maryland—Unlike most other states, Maryland does not require general contractors to hold a license in order to perform work. However, the state does require a bond of no less than $20,000 based on the details of the job.
  • Massachusetts—Cities and municipalities set the license requirements and bond minimums for general contractors operating in the state of Massachusetts.
  • Mississippi—General contractors in Mississippi may be required to meet certain bonding requirements and licensing guidelines based on the type of work they intend to do in the state.
  • Michigan—General contractors in Michigan must review guidelines for licensing and bonding per the municipality in which the work will be performed.
  • Minnesota—Licensing requirements and bonding minimums for Minnesota general contractors are set by the cities and municipalities, so they vary widely.
  • Missouri—Cities and municipalities in Missouri set licensing and bonding requirements for general contractors, so amounts vary from place to place.
  • Montana—Montana cities and municipalities set general contractor licensing guidelines, along with bonding minimums.
  • Nebraska—General contractors working on a project valued at more than $2,500 in Nebraska counties that have more than 100,000 residents must have a county license to operate legally. Additionally, a bond minimum of $1,000 is required for jobs up to $10,000 in value. A higher bond is required for more expensive jobs.
  • Nevada—A license to operate as a general contractor in Nevada is needed for most projects, with values set by each city and municipality. However, the state requires a bond between $1,000 and $500,000 based on the value of each project.
  • New Hampshire—As a general contractor in New Hampshire, information about licensing requirements and bonding minimums are found at the city or municipal level.
  • New Jersey—Operating as a general contractor in New Jersey means one must be licensed to do so and have a bond in place ranging from $1,000 to $3,000 in most cases.
  • New Mexico—Any general contractor working in New Mexico is required to hold a license and secure a bond of at least $10,000 in most cases.
  • New York—Most general contractors working in New York must have a license, as the project-value minimum requiring a license is low at $200. Additionally, bonds ranging from $25,000 to $200,000 may be required, depending on the location of the work.
  • North Carolina—Two categories for general contractors exist in North Carolina—limited and intermediate. Licenses for limited contractors are required when the work performed does not exceed $500,000 in value. Intermediate licensing is required for projects worth up to $1,000,000. For most general contractors, bonds ranging from $350,000 to $2,000,000 must be in place based on the type of license held.
  • North Dakota—General contractors in North Dakota may not need to secure a license in order to perform work. However, a bond of no less than $15,000 may be required.
  • Ohio—All general contractors working in Ohio must have a license to do so, along with a bond ranging from $5,000 to $25,000. Bond amounts are based on city or county guidelines.
  • Oklahoma—In the state of Oklahoma, general contractors may need a license if the work performed exceeds a certain amount set by the city or county. Bonds of at least $5,000 are also required.
  • Oregon—When project work is valued at more than $1,000, general contractors in Oregon must hold the appropriate license. Also, a bond ranging from $10,000 to $20,000 is needed for residential work, and a bond between $20,000 and $75,000 is needed for commercial projects.
  • Pennsylvania—General contractors in Pennsylvania can find guidelines for licensing and bonding through the municipality in which they work.
  • Rhode Island—Most general contractors in Rhode Island do not require a license. However, a bond may be necessary for certain jobs, depending on the location of the work.
  • South Carolina—Any work valued at more than $5,000 means a general contractor must secure a license. A bond of no less than $10,000 is also required for South Carolina general contractors.
  • South Dakota—A license for general contract work may not be required in South Dakota. However, a bond may be a requirement depending on where the project is located in the state.
  • Tennessee—General contractors working in Tennessee must have a license, no matter how big or small the project. There is no state mandated bond requirement, but projects may need a bond ranging from $500,000 to $1,000,000.
  • Texas—Texas cities and municipalities regulate licensing and bonding requirements for general contractors.
  • Utah—All general contractors working in Utah must have a valid license. A bond is also required, ranging from $15,000 up to $100,000, based on the value of the project and the general contractor’s work history.
  • Vermont—Cities and municipalities in Vermont set both licensing and bonding requirements for general contractors.
  • Virginia—Several general contractor licenses are available in Virginia, based on the value of each project to be completed. Bond requirements vary from city to city and are dependent on the value of work.
  • Washington—In the state of Washington, general contractors are required to secure a license, as well as a bond for at least $12,000.
  • West Virginia—All projects worth more than $2,500 require a general contractor license in West Virginia. A bond may also be required, but the amount is determined by the city or municipality in which the work will be completed.
  • Wisconsin—General contractors in Wisconsin may have a license requirement based on the type of work they plan to do in the state. A bond may also be required as part of the licensing process, with minimums dependent on the value of each project.
  • Wyoming—Cities and municipalities in Wyoming set licensing and bonding requirements for general contractors.

Holding the appropriate general contractor license, along with the right bond per project, is an essential component of operating legally in each state.

Be sure to check with the city or municipality where you plan to work to ensure you are meeting the requirements of each project before beginning. For more information, visit jwsuretybonds/states.com