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 Georgia contractor license bond needs. Learn how to get a contractor’s license in Georgia, below.
What Contractor Licenses Are Issued in Georgia?
The Georgia Board for Residential and General Contractors issues four different types of contractor licenses:
- Residential-Basic Contractor License. Work is limited to detached one-and two-family homes and single-family townhouses of three stories or less.
- Residential-Light Commercial Contractor License. This includes all work allowed under a residential-basic contractor license, plus work on multi-family homes and multi-use light commercial buildings.
- General Contractor Licenses involve unlimited contractor services.
- General Contractor-Limited Licenses include everything permitted under a general contractor license but with a contract limit of $500,000.
Education, experience, financial, and insurance requirements differ by license type.
What Are the Steps in the Licensing Process?
In general, getting licensed as a contractor in Georgia involves the following steps, though the details vary depending on the specific type of license you’re seeking:
- Determine which type of license you need and ensure that you meet the basic education requirements. If you haven’t already passed the required exam for your particular license type, you must do so before applying for licensure.
- Complete the appropriate license application, which can be downloaded from the Board’s website.
- Complete and gather the required supporting documents (e.g., affidavits, consent for background check, certificates of workers’ compensation and general liability insurance, proof of net worth, etc.). Residential contractors have the option of purchasing a $25,000 Georgia contractor license bond to satisfy the proof of net worth requirement.
- Pay the nonrefundable license fee (currently $200).
- Submit your entire application package for review/approval.
If you take advantage of the option to purchase a surety bond, be aware that it must remain in force at all times to avoid license suspension or revocation.
Why is a Contractor License Bond Required?
A Georgia contractor license bond serves several purposes:
- It is the contractor’s guarantee to operate in compliance with applicable laws and regulations.
- It protects the state of Georgia against liability for damages caused by a state-licensed contractor.
- It protects clients against financial loss due to a licensed contractor’s unlawful or unethical actions and provides a way to compensate any such injured party.
A client who incurs a financial loss because of the contractor’s violation of the terms of the surety bond agreement can file a claim for damages against the contractor’s Georgia contractor license bond. The surety company (known simply as the “surety”) will determine whether the claim is valid and should be paid.
How Are Contractor License Bond Claims Paid?
There are three parties to every surety bond agreement—the surety, the obligee requiring the bond (in this case, the state of Georgia), and the principal (the contractor) required to purchase it. The agreement is legally binding between all three parties. It obligates the principal to pay all valid claims, but unless the principal pays it promptly, the surety will go ahead and pay it on behalf of the principal. This advance payment creates a debt that the principal must then repay to the surety.
How Much Does a Georgia Contractor License Bond Cost?
A Georgia contractor license bond is sold for an annual premium that’s a small percentage of the $25,000 required bond amount. What that percentage (the premium rate) will be is determined by the surety and reflects the surety’s assessment of the principal’s creditworthiness and financial stability.
With a good personal credit score, you’ll most likely qualify for a premium rate in the range of 1-3%, or $250 to $750 per year.
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