Quick Facts:

  • Regulating Agency: Local municipalities (No statewide general contractor license)
  • Required Bond Amount: $5,000-$50,000 (varies by municipality)
  • Cost Range: $100-$1,500 annually (depending on credit)
  • Required For: General contractors and right-of-way contractors (varies by city)

What Is a Colorado Contractor License Bond?

A Colorado contractor license bond is a surety bond that serves as a financial guarantee that contractors will comply with state laws, building codes, and ethical standards. If a contractor violates regulations or performs faulty work, affected parties can make a claim on the bond for compensation. These bonds protect consumers and municipalities by ensuring contractors follow established standards.

Who Regulates Colorado Construction Contractor Licensing?

Unlike many states, Colorado does not have a statewide license requirement for general contractors. General building contractors are licensed at the local level (by cities or counties), not by the state. The state only requires licensing for specific trades:

  • Electrical Contractors: Licensed by the Colorado Electrical Board
  • Plumbing Contractors: Licensed by the Colorado State Plumbing Board

Each municipality sets its own contractor licensing rules, with major cities like Denver, Colorado Springs, Aurora, and Fort Collins each having their own requirements.

Official sites:

What Bond Amount Is Required in Colorado?

Bond amounts vary significantly by municipality and license type:

  • Denver:
    • General Contractor License: $50,000
    • Structural Contractor License: $25,000
    • Special Contractor License: $10,000
    • Right-of-Way Contractors (Sewer/Paving): $50,000
  • Colorado Springs:
    • Concrete Contractor License: $5,000
    • Excavation Contractor License: $5,000
    • General Building Contractors: No bond required (handled through PPRBD)
  • Aurora:
    • Right-of-Way Contractor: $20,000
    • General Building Contractors: No bond required
  • Fort Collins:
    • Right-of-Way Contractor: $20,000
    • General Building Contractors: No bond required
  • Other Cities:
    • Arvada Municipal Contractor: $20,000
    • Bond requirements in smaller municipalities vary widely

How Much Does a Contractor Bond Cost in Colorado?

The cost of a contractor license bond in Colorado is a fraction of the bond’s face value, paid as an annual premium:

  • Typical Range: 1%-3% of the bond amount for contractors with good credit
  • Examples:
    • $5,000 bond: $100-$150 annually
    • $20,000 bond: $200-$600 annually
    • $50,000 bond: $500-$1,500 annually
  • Factors Affecting Cost:
    • Credit score and financial history
    • Years in business
    • Industry experience
    • Prior claims history
    • Bond amount required
  • Credit Considerations:
    • Excellent credit: May qualify for rates as low as 1%
    • Fair credit: Typically 2-3% of bond amount
    • Poor credit/bankruptcy history: May pay 5-10% of bond amount

Most surety companies have a minimum premium (often around $100) regardless of bond amount. Premiums are paid annually as the bond must be kept active for license renewal.

Who Needs a Contractor License Bond in Colorado?

Bond requirements vary by municipality and contractor type:

  • General Building Contractors:
    • Required in Denver ($50,000)
    • Not required in Colorado Springs, Aurora, or Fort Collins
  • Right-of-Way Contractors:
    • Required in almost all municipalities
    • Applies to anyone working on streets, sidewalks, sewers, or public property
    • Bond amounts range from $5,000 (Colorado Springs) to $50,000 (Denver)
  • Electrical/Plumbing Contractors:
    • No bond required for state licensing
    • Must register state license with local jurisdiction
    • No additional bond typically required unless acting as general contractor
  • HVAC/Mechanical Contractors:
    • Generally licensed at local level
    • Most cities require certification and insurance rather than bonds
  • Specialty Contractors:
    • Requirements vary by city and specialty
    • Most focus on certification and insurance rather than bonds
    • Check local ordinances for specific requirements

What Other Contractor Bonds Are Required in Colorado?

Beyond license bonds, contractors may encounter other bond types:

  • Performance Bonds:
    • Required for public projects
    • Guarantees completion according to contract terms
    • Typically 100% of contract price
    • Required by law for Colorado public works over $150,000
  • Payment Bonds:
    • Often paired with performance bonds
    • Ensures payment to subcontractors and suppliers
    • Typically 100% of contract price
    • Required for most public projects
  • Bid Bonds:
    • Required when bidding on public projects
    • Typically 5-10% of bid amount
    • Guarantees contractor will honor bid and furnish performance/payment bonds

How Does ContractorNerd’s Application Process Work?

Our streamlined bond application process makes getting your Colorado contractor license bond quick and easy:

  1. Complete Application: Fill out our simple online application with basic business information
  2. Receive Quote: Get a competitive rate based on your credit and business history
  3. Sign Documents: Review and sign bond forms electronically
  4. Pay Premium: Make secure payment online
  5. Receive Bond: Get your bond certificate immediately for license filing

How Quickly Can I Purchase a Bond?

With our efficient system, you can receive your Colorado contractor license bond quickly:

  • Same-Day Service: Complete applications can be processed and issued the same day
  • Instant Quotes: Many applicants receive immediate quotes online
  • Electronic Delivery: Bond certificates delivered to your email as soon as approved
  • Rush Processing: Available for urgent licensing needs

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

After purchasing your bond:

  1. You (the contractor) are responsible for filing the bond with the appropriate licensing authority
  2. The bond must be on the city’s official bond form and list the city as the obligee
  3. Each municipality has specific filing requirements – check local regulations
  4. Our partner can assist with proper filing if needed, ensuring your paperwork is correct

How Are Claims Handled on a Colorado Contractor Bond?

If a claim is made against your contractor license bond:

  1. The claimant (municipality or consumer) files a claim with the surety company
  2. The surety investigates the claim’s validity
  3. If valid, the surety pays the claim up to the bond amount
  4. You (the contractor) must reimburse the surety company for any paid claims
  5. Multiple claims can be filed up to the total bond amount

Claims typically result from code violations, abandoned projects, or failure to pay for permits or fines.

Frequently Asked Questions (FAQ)

What if I have bad credit? Even with credit challenges, we can often secure bonds through our specialized market access. Rates may be higher (5-10% of bond amount), but we work to find the most competitive option for your situation.

What are the penalties for working without a required bond? Operating without a required bond can result in:

  • License suspension or revocation
  • Stop work orders
  • Fines and penalties
  • Ineligibility for permits
  • Potential legal action from the municipality

How do bond renewals work? Most contractor license bonds must be renewed annually:

  • Renewal notices are sent 30-60 days before expiration
  • Premiums may change based on updated credit or claims history
  • Bonds must remain active for license renewal
  • Multi-year options may be available in some cities (Aurora requires minimum 2-year bond)

What’s the difference between a bond and insurance?

  • Bond: Protects the public/municipality from contractor non-compliance
  • Insurance: Protects the contractor from covered losses
  • Both are typically required but serve different purposes
  • Bonds can be claimed against if you fail to meet obligations
  • Insurance covers accidents, property damage, or injuries

Ready to Get Your Colorado Contractor License Bond?

Apply Now for a free, no-obligation quote on your Colorado contractor license bond. Our specialists understand local requirements and will ensure you get the right bond at competitive rates.