In this article, we’ll walk you through everything you need to understand Hawaii’s contractor license requirements.
Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. Our expert agents are ready to assist with all your contractor licensing needs.
What Are the Different Types of Hawaii Contractor Licenses?
Hawaii’s Department of Commerce and Consumer Affairs (DCCA), Professional and Vocational Licensing Division has a Contractor Licensing Board who issues three main types of contractor licenses, with multiple subtypes.
- General engineering contractor
- General building contractor
- Specialty contractor
What Are the Steps in the Licensing Process?
Contractor licensing requirements include:
- Registering your business with DCCA’s Business Registration Division (BREG) unless you’re a sole proprietor, in which case you need provide only your social security number
- Providing a compiled, reviewed, or audited financial statement no more than 12 months old with a report from an independent accountant
- Furnish a complete 5 year credit report
- For a business that’s more than one years old, you must provide a current Hawaii State Tax Clearance issued within the last six months
- Documentation showing at least four years of experience as a construction supervisor
- For sole proprietors, passing the Hawaii license practice test
Once you have completed your license application and submitted it with all supporting documents and payment of the $50 application fee, the Board will review it. If they approve it, they will determine your licensing fee.
At that point, you will have to:
- Register for and pass an exam,
- Purchase Workers’ Compensation insurance (if you will have employees) and liability and property damage insurance, and
- Obtain a contractor’s license bond if required by the Board
The required bond amount will be determined by the Board, with a minimum of $5,000.
Why is a Hawaii Contractor License Bond Required?
A Hawaii contractor license bond obligates you to comply with all applicable laws and regulations and to pay all valid claims for damages resulting from your failure to do so. This provides financial protection for the state and for construction project owners, subcontractors, laborers, suppliers, and others harmed by your noncompliance with the law.
How Are Hawaii Contractor License Bond Claims Paid?
When you purchase a Hawaii contractor license bond you are entering a legally binding contract with two other parties: the state of Hawaii (the “obligee” requiring the bond) and the “surety” (the company guaranteeing that you (the bond’s “principal”) will pay all valid claims.
Although you are legally obligated to pay any claim the surety determines is valid, the surety typically will pay it on your behalf and collect reimbursement from you. If you don’t repay the surety, you may be subject to legal action.
How Much Does a Hawaii Contractor License Bond Cost?
The annual premium for a Hawaii contractor license bond is a small percentage of the required bond amount. The surety will determine what that percentage (the premium rate) will be based on an underwriting assessment of the risk that you won’t repay the surety for claims paid on your behalf.
The main factor the underwriters will take into account is your personal credit score. The better your credit score, the lower the risk the surety will be taking on, and therefore the lower your premium rate will be. With very good credit, your premium rate could be one percent.
Our surety bond professionals will get you the Hawaii contractor license bond you need at a competitive rate.
