Quick Facts:
- Regulating Agency: Georgia State Licensing Board for Residential and General Contractors
- Required Bond Amount: $25,000 (for state license)
- Cost Range: $100-$250 annually (depending on credit)
- Required For: Residential and General Contractors
What Is a Georgia Contractor License Bond?
A Georgia contractor license bond is a surety bond that serves as a financial guarantee that contractors will comply with all applicable laws, building codes, and ethical standards when performing work. The bond protects the public by providing financial recourse if a contractor violates regulations or fails to fulfill contractual obligations. It involves three parties – the contractor (principal), the government or licensing agency (obligee), and the surety company that issues the bond – and holds the contractor accountable for their work.
Who Regulates Georgia Construction Contractor Licensing?
The Georgia State Licensing Board for Residential and General Contractors regulates contractor licensing at the state level. This board oversees the licensing process, including the bond requirement for residential and general contractors. The board is located at 237 Coliseum Drive, Macon, GA 31217.
Official Website: Georgia Secretary of State – Professional Licensing Boards
What Bond Amount Is Required in Georgia?
The standard bond amount for a general or residential contractor’s license in Georgia is $25,000. This requirement applies to all residential license types (Residential-Basic, Residential-Light Commercial) as well as General Contractor (including General Contractor Limited Tier). This amount is set by statute and the bond must remain at full value during the license period.
For specialty contractors, Georgia has specific bond requirements for Water Well Contractors ($30,000) and Water Well Pump Contractors ($20,000).
Many cities and counties in Georgia impose their own bonding requirements on contractors operating within their jurisdiction. These local bonds are usually termed “contractor license bonds” or “contractor permit bonds”, and they are separate from (and in addition to) the state license bond. For example:
- Atlanta: 100% of contract value for projects exceeding $20,000
- Augusta: $20,000 for Commercial Contractors, $15,000 for Residential Contractors, $5,000 for Specialty Contractors
- Savannah: $2,000 for business license/permit bond
How Much Does a Contractor Bond Cost in Georgia?
Contractors do not pay the full bond amount; instead, you pay a premium which is usually a small percentage of the bond’s value. For license bonds in Georgia, premiums typically range from about 1% up to 10% of the bond amount per year. For example, a $25,000 bond might cost around $125-$250 per year for an applicant with good credit. Applicants with lower credit scores or little experience might pay higher rates, often in the 5-10% range (up to $2,500 on a $25k bond).
The $25,000 Georgia contractor license bond is relatively inexpensive for most applicants. Many surety companies offer a flat annual premium around $100 to $150 for this bond if you have decent credit. Some surety companies even offer the bond for as low as $125 for a 1-year term (with discounts for multi-year).
Because some underwriters consider this bond low-risk, no credit check may be required, meaning even contractors with weaker credit can get the standard rate.
Who Needs a Contractor License Bond in Georgia?
In Georgia, contractor license bonds are required for various types of contractors:
- Residential and General Contractors (state requirement)
- Water Well Drillers and Pump Installers (state requirement)
- Local contractors working in specific cities/counties (local requirements)
Georgia does not require a state-issued surety bond for electrical contractor licensing, plumbing contractor licensing, HVAC (conditioned air) contractor licensing, or low-voltage contractor licensing. However, many local authorities do require bonds when you go to pull permits or register as a contractor in a city or county.
What Other Contractor Bonds Are Required in Georgia?
For out-of-state contractors doing a job in Georgia over a certain amount (typically contracts ≥ $250,000), Georgia law requires either a 2% withholding on payments or a bond equal to 10% of the contract price to guarantee payment of sales and use taxes.
The City of Atlanta also requires bonds for Land Disturbance (Erosion Control) – $3,000 per disturbed acre, and a Right-of-Way Restoration Bond of $500,000 for work in the public right-of-way.
Some counties require bonds for certain kinds of work, like an erosion control bond (for land-disturbance permits) or a driveway/sidewalk bond (to ensure proper installation in right-of-way). For example, Gwinnett County may require a $10,000 bond for residential sewer contractors connecting to the county system. Cherokee County might require a bond for septic installers.
How Does ContractorNerd’s Application Process Work?
Applying for a Georgia contractor bond is straightforward. Our process includes:
- Complete a simple application with your name/business info, license type, and bond amount
- Undergo a credit check (if required – many small license bonds skip this for speed)
- Receive a quote and pay the premium
- Get your bond issued, complete with power of attorney document
How Quickly Can I Purchase a Bond?
Georgia’s contractor bonds are competitive – providers often advertise “instant issue” at low rates due to the relatively low risk of these compliance bonds. For many standard bonds, same-day approval is common.
Who Files the Bond With the GA Once It Is Purchased?
Once payment is made, the surety will issue the bond, attaching a power of attorney (proof of the surety agent’s authority). You will receive the original bond document with signatures and seals to file with the licensing authority.
For the state contractor license, you submit the bond (or a bond rider, if renewing) along with your license application or renewal to the Secretary of State’s Professional Licensing Division.
How Are Claims Handled on a Georgia Contractor Bond?
If a claim ever gets paid on your bond, the surety will come to you for reimbursement. An unpaid bond claim can hurt your credit and ability to get bonded in the future. Claims on license bonds are rare if you operate ethically.
If a contractor violates city codes or defrauds a customer, the city can use the bond to help compensate the victim or penalize the contractor.
The bond protects the municipality and consumers by providing funds if a contractor violates the building code or doesn’t pay required fees. For example, if a contractor did substandard work and refused to fix it, the city could potentially claim the bond to cover the cost of corrections or to reimburse a harmed homeowner (up to the bond amount).
Frequently Asked Questions (FAQ)
What if I have bad credit?
Because some underwriters consider contractor license bonds low-risk, no credit check may be required for many Georgia bonds, meaning even contractors with weaker credit can often get the standard rate.
What are the penalties for not having a bond?
If a required bond lapses, your license can be suspended. Without proper licensing and bonding, you cannot legally work as a contractor in Georgia.
How do bond renewals work?
State-level contractor license bonds in Georgia run on a biennial term to coincide with the license period. All Georgia residential and general contractor licenses expire on June 30 of even-numbered years, and the $25,000 bond must be renewed at the same time (every two years). Sureties typically offer renewal notices well in advance of expiration and may allow multi-year bond terms at a discounted rate.
Local license bonds are usually on annual terms (often expiring with the calendar year or with your local business license expiration).
What’s the difference between a bond and insurance?
A contractor license bond is not insurance for the contractor, but rather a guarantee for others. If the contractor fails to meet their obligations (such as abandoning a project, violating codes, or not paying required fees), the bond provides a source of compensation for the harmed party. The surety company would pay valid claims up to the bond’s amount, and the contractor must then reimburse the surety.
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