Nevada Contractor License Surety Bonds
In the state of Nevada, contractor license surety bonds are required before you can legally do construction work. To be more specific, the bond can be avoided, but only if the company makes a cash deposit with the state equal to the assigned bond amount, and those amounts regularly get into the tens of thousands of dollars. In general, bonds require less cash from the business in question, and they serve as the financial backing for the purpose of securing compliant work. It’s important to understand that these surety bonds are a requirement in addition to gaining a contractors license. They are not included in licensing fees and processing. Instead, the bond is an additional cost that serves to financially incentivize proper contracting work within the borders of Nevada, and surety bond requirements must be fulfilled before the license will be granted.
How Much Does a Nevada Contract License Bond Cost?
Bonds vary and the monetary limit granted is assigned on a case-by-case basis. The Nevada State Contractors Board will ultimately set the bond amount. They will go through a careful evaluation of the business. That will include a review of financial responsibility history, field experience, character of the applicant and monetary limits. Additionally, there are multiple types of licenses, and the license type will impact the bond value. Because of the variety of factors, a bond amount quote can range from $1,000 to $500,000. That’s a huge variance, and it will largely be impacted by the type of work you intend to do and information tied to your company and experience.
Why Do I Need a Nevada Contractor License Bond?
The state of Nevada sets the rules. According to state legislation, all contractors must comply with the Nevada Revised Statutes. This lists all of the duties that befall a contracting company, and securing a surety bond is one of those duties. To explain in more detail, bonds are required by the state and local municipalities in order to legally perform contracting work. The bond is intended to serve as an incentive for financial responsibility that pushes contractors to abide by codes and regulations. If a party is harmed or wronged by negligence in this regard, the surety bond will be released and paid out to the wronged parties. That can include the contracting client, the state, local governments and other people who may be caught up in the situation. The amount of a bond requirement reflects actuarial expectations tied to such damages.
Who Requires Me to Have a Nevada Contractor License Bond?
The bond is required by the state of Nevada. Those requirements are overseen by the Nevada State Contractors Board. They are in charge of contractor licensing, and they also determine bond amounts that must be honored (which are determined when the license is approved). Additional requirements may also exist. Each county and municipality has the freedom to establish their own addition to building codes and contracting statutes. Those additions can include provisions regarding contractors licensing bonds and other surety bonds. In total, each level of government with jurisdiction over a construction site has the authority to place requirements and initiate claims on surety bonds and determine what applications must do in order to comply.
Does a Nevada Contractor License Bond Renew Every Year?
The standard in Nevada is to renew the surety bonds every two years. It is vital that renewal is completed before the expiration date, or else the contractors will be in violation of the Nevada Revised Statutes. The renewal process will vary by case. In most instances, the bond writer will be able to process renewal with minimal effort and hassle. In special cases, a company may want to contest the cost vs amount of their bond(s). This review process can be time consuming. Overall, the renewal date and process in your bond will be outlined in its contract. If you aren’t on a two-year renewal plan, it’s important to read the contract and understand the renewal terms and conditions. Operating without license bonds can be devastating for a company in Nevada and can destroy your standing with the contractors board. These regulations simply must be followed.
How Do I Get a Nevada Contract License Bond?
Acquiring license bonds requires a few steps. First, a license must be awarded, and that is a multi-step process. Applying for a Nevada contractor’s license begins with choosing a classification. They come in A, B and C, which applies to general engineering, general building and specialty contracting, respectively. Once the classification is selected, you will be required to provide financial statements and submit a criminal background check. With that information, you can officially register with the Nevada Secretary of State. There is a $300 application fee, and then you will have to take a licensing test. When the license is awarded by the contractors board, your bond amount will be set. From that point, you can contact the bonding agency to underwrite your bond. From there, you’re good to go. You are eligible to do construction work in Nevada, and the only bond obligations from there are to renew the bond as outlined in the contract and pay out any bond claims that are verified by the bond company.
