Quick Facts:

  • Regulating Agency: Alaska Department of Commerce, Community, and Economic Development (DCCED), Division of Corporations, Business and Professional Licensing
  • Required Bond Amount: $5,000 – $25,000 (varies by contractor type)
  • Cost Range: $100 – $750 annually (depending on credit)
  • Required For: General Contractors, Specialty Contractors, Residential Contractors, Mechanical Contractors, and Handyman Contractors

What Is an Alaska Contractor License Bond?

A contractor license bond is a surety bond that acts as a financial guarantee, ensuring the contractor will follow all state laws, building codes, and contract terms – offering protection to clients and the public in case of violations. In Alaska, contractors must obtain a license bond as part of the licensing process, mandated by the Alaska Department of Commerce, Community, and Economic Development (DCCED). These bonds provide a source of funds for consumers or suppliers if a contractor fails to pay bills, perform work properly, or violates the terms of a contract.

Who Regulates Alaska Construction Contractor Licensing?

The Alaska Department of Commerce, Community, and Economic Development (DCCED), specifically their Division of Corporations, Business and Professional Licensing, regulates contractor licensing in Alaska. This agency enforces licensing requirements including bond amounts and oversees compliance with state laws.

  • Official site: https://www.commerce.alaska.gov/web/cbpl/ProfessionalLicensing/ConstructionContractors.aspx

What Bond Amount Is Required in Alaska?

Alaska law requires different bond amounts for different categories of contractors:

  • General Contractor (Commercial work): $25,000
  • General Contractor (Residential-only): $20,000
  • Specialty Contractor: $10,000
  • Mechanical Contractor: $10,000
  • Handyman Contractor (projects ≤ $10,000): $5,000

How Much Does a Contractor Bond Cost in Alaska?

For applicants with good credit, the bond premium is often in the range of 1%–3% of the bond amount per year (approximately $250 to $750 annually for a $25,000 bond). Well-qualified contractors might even see premiums around 1% (around $250 for a $25,000 bond).

Factors impacting cost include:

  • Credit score of business owner
  • Company’s financial strength
  • Previous claims history
  • Those with credit challenges or limited business history may pay higher rates – typically up to 5% or even as high as 7–10% of the bond amount in some cases.

Who Needs a Contractor License Bond in Alaska?

In Alaska, most contractors that work on projects must be licensed and bonded. This includes:

  • General Contractors (Commercial) – anyone performing commercial construction or unrestricted contracting work
  • Residential Contractors – contractors who work exclusively on residential projects (building or remodeling homes up to four units)
  • Specialty Contractors – contractors working in a single specialized trade (roofing, painting, plumbing, electrical, carpentry, etc.)
  • Mechanical Contractors – contractors focusing on mechanical systems (HVAC, refrigeration, plumbing, heating systems)
  • Handyman or Limited Scope Contractors – contractors who take on only small projects ($10,000 or less per job)

What Other Contractor Bonds Are Required in Alaska?

While the license bond is the primary bond requirement, contractors may also need:

  • Project-specific Performance Bonds – for government projects
  • Payment Bonds – for certain larger projects
  • Workers’ Compensation Insurance – required alongside the bond
  • Liability Insurance – often required alongside the bond

How Does ContractorNerd’s Application Process Work?

  1. Complete a simple online application with basic business information
  2. Get a fast credit check (usually a “soft” pull that does not affect credit scores)
  3. Receive your quote – often within minutes online
  4. Pay online and receive your bond documentation electronically
  5. File the bond form with the state licensing division

How Quickly Can I Purchase a Bond?

For most qualified contractors, the underwriting process is quick – approval can often be obtained within minutes online or on the same day. Many applicants with decent credit are approved instantly or within a short time frame. Our digital process means same-day quotes and often same-day bond issuance.

Who Files the Bond With the AK Once It Is Purchased?

The bond form must be filed with the state licensing division as proof of compliance. Our partner can handle bond filing directly with the state on your behalf, or you can choose to file it yourself with your license application. The bond must remain continuous as long as your license is active.

How Are Claims Handled on an Alaska Contractor Bond?

In the event of a claim, the surety will investigate and, if the claim is valid, pay out damages up to the bond amount; however, the contractor is then obligated to reimburse the surety for any claim payments (since the bond is an indemnity guarantee, not insurance for the contractor).

Contractor responsibilities:

  • Reimburse the surety for all valid claims paid out
  • Maintain the bond’s continuous status
  • Avoid conduct that would lead to claims

Frequently Asked Questions (FAQ)

Bad credit? Can I still get bonded?
Yes. Contractors with credit challenges can still get bonded in most cases, but they may need to go through specialty sureties and pay a higher premium.

What are the penalties for operating without a bond?
Operating without a required bond in Alaska can result in license suspension or revocation. The bond is a legal requirement, and if it’s canceled or lapses, the contractor’s license is no longer in good standing.

How does bond renewal work?
The bond is continuous until canceled, but it will need periodic renewal (usually every one or two years) by paying the next premium. Alaska requires that a bond stay in effect for at least 3 years after cancellation.

What’s the difference between a bond and insurance?
A bond is an indemnity guarantee, not insurance for the contractor. While insurance protects the contractor from claims, bonds protect customers, subcontractors, suppliers, and government entities from contractor non-compliance or malfeasance.

Ready to Get Your Alaska Contractor License Bond?

Apply now through our quick online quote system to get instant pricing based on your specific contractor type. Our bond experts are also available to help you navigate Alaska’s requirements and find the most competitive rates.