Contractor’s License Requirements in South Carolina

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In this article, we’ll walk you through everything you need to get a contractor license in the state of South Carolina.

Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your South Carolina contractor license bond needs.

What Contractor Licenses Are Issued in South Carolina?

South Carolina’s Department of Labor, Licensing and Regulation (SCLLR) issues two types of contractor licenses, with multiple classifications for each, through two different boards:

  • General and mechanical contractor licenses, and  
  • Residential builder and specialty contractor licenses

What Are the Steps in the Licensing Process?

Before you will be granted a South Carolina contractor license of any type, you will need to:

  • Register your business with the Secretary of State’s office and with the South Carolina Department of Revenue
  • Provide proof of relevant experience
  • For all general and mechanical and some specialty contractor licenses, pass an exam
  • Purchase workers’ compensation insurance if you will have employees
  • Purchase a South Carolina contractor license bond
  • Complete and submit the appropriate license application form, along with payment of the applicable fees

Why is a Contractor License Bond Required?

Not all South Carolina contractors are subject to a contractor license bonding requirement. But for those who are, the purpose is to provide financial protection for the licensing authority and the public against financial losses caused by the contractor’s unlawful or unethical business practices. 

The bond is a contractor’s pledge to abide by all applicable laws and building codes. It gives those who suffer a financial loss as a result of a violation the right to file a claim against the bond and be compensated for the damages up to the required bond amount established by the licensing authority (the bond’s “obligee”). 

How Are Contractor License Bond Claims Paid?

Every contractor license bond legally obligates the contractor (the bond’s “principal”) to pay all claims that the bond’s guarantor (known as the “surety”) deems valid. However, the surety typically pays the claim initially and is subsequently reimbursed by the principal. Failure to repay the surety can result in the surety taking legal action to secure repayment.

How Much Does a South Carolina Contractor License Bond Cost?

To purchase a South Carolina contractor license bond you will pay an annual premium that is the product of multiplying the required bond amount set by the obligee by the premium rate assigned to you by the surety. The surety’s main concern in setting your premium rate is being reimbursed for claims paid on your behalf.

The best predictor of whether or not you will repay the surety for claims paid on your behalf is your personal credit score. If you have managed credit responsibly in the past, the likelihood is that you will continue to do so, and you will be rewarded for your creditworthiness with a low premium rate, typically in the range of one to two percent. If the underwriters believe that there is a high risk that you won’t repay your debt to the surety, your premium rate could be as high as three percent.

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