Quick Facts:

  • Regulating Agency: Massachusetts Office of Consumer Affairs and Business Regulation (OCABR)
  • Required Bond Amount: 6.25% of contract value for out-of-state contractors; $5,000-$20,000 for local bonds
  • Cost Range: $100-$500 annually (depending on credit)
  • Required For: Out-of-state contractors, specialty contractors, and contractors working in specific cities/towns

What Is a Massachusetts Contractor License Bond?

Contractor license bonds are a type of surety bond that ensure contractors comply with applicable laws, regulations, and codes. They protect customers, the public, or government entities from harm due to illegal or substandard work. If a contractor violates the law, fails to complete the work, or causes damages, an affected party can make a claim against the bond to recover losses. In essence, the bond guarantees the contractor will fulfill their obligations in an ethical and lawful manner.

Who Regulates Massachusetts Construction Contractor Licensing?

Massachusetts does not have a blanket bond requirement for all licensed contractors at the state level. Instead, certain contractors must obtain specific bonds under state law or regulations. The main regulatory bodies include:

  • Massachusetts Department of Revenue (DOR) – For out-of-state contractor bonds
  • Department of Fire Services – For blasting contractor bonds
  • Local municipalities – For city/town-specific contractor bonds

Official site: https://www.mass.gov/orgs/office-of-consumer-affairs-and-business-regulation

What Bond Amount Is Required in Massachusetts?

Massachusetts has several different bond requirements:

  • Out-of-State Contractor Bond: 6.25% of the total contract price for projects valued at $20,000 or more
  • Blasting Contractor Bond: Fixed amount of $20,000
  • Home Improvement Contractor (HIC): No bond required by state
  • Local Contractor License Bonds: Typically $5,000 (ranging up to $10,000)
  • Street Opening Bonds: $5,000 in many towns; up to $10,000-$20,000 in large cities like Boston
  • Sewer/Water Bonds: $5,000 in smaller towns; $10,000-$20,000 in larger cities
  • Demolition/Moving Bonds: Varies by project ($10,000-$100,000+)
  • Sign Installation Bond: $1,000-$5,000

How Much Does a Contractor Bond Cost in Massachusetts?

Bond costs are a small fraction of the total bond amount and are primarily based on the contractor’s credit score and financial history. For contractors with good credit (approximately 700+ FICO score), costs typically range from 1-3% of the bond amount.

Examples:

  • Out-of-State Contractor Bond: $100-$200 premium for a $6,250 bond on a $100,000 project
  • Blasting Operations Bond: $200-$400 per year for a $20,000 bond
  • Local Contractor License Bonds: ~$100/year for a $5,000 bond; $100-$150 for a $10,000 bond
  • Street/Sidewalk Opening Bonds: ~$100 for a $5,000 bond; $200-$300 for a $20,000 bond

Factors affecting cost:

  • Credit score
  • Business financial history
  • Claims history
  • Experience in the industry

Who Needs a Contractor License Bond in Massachusetts?

The following contractors need bonds in Massachusetts:

  • Out-of-state contractors working on projects valued at $20,000 or more
  • Contractors performing explosive blasting work
  • Contractors operating in municipalities that require local bonds
  • Contractors performing street opening, excavation, or utility work
  • Contractors performing demolition or structure moving work
  • Sign installation contractors in certain municipalities

What Other Contractor Bonds Are Required in Massachusetts?

For public construction projects in Massachusetts, performance and payment bonds are often legally required (typically for contracts over $25,000 on public jobs). These are contract bonds, not license bonds, and protect the project owner and subcontractors/suppliers. They come into play on a per-project basis.

Other required bonds may include:

  • Street/Sidewalk Opening Bonds
  • Sewer and Water (Utility) Contractor Bonds
  • Demolition and Structure Moving Bonds
  • Sign Installation Bonds

How Does ContractorNerd’s Application Process Work?

Our streamlined application process makes it easy to get the bond you need:

  1. Complete our simple online application
  2. Receive an instant quote based on your credit and business profile
  3. Pay securely online
  4. Receive your bond certificate immediately via email

The entire process can often be completed in minutes, with no paperwork needed.

How Quickly Can I Purchase a Bond?

With our online system, you can purchase most Massachusetts contractor bonds instantly. After completing the application and payment, you’ll receive your bond certificate immediately via email. Even for larger or specialty bonds, we typically process applications within 24 hours.

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

For most Massachusetts contractor bonds, you (the contractor) are responsible for filing the bond with the appropriate authority:

  • Out-of-state contractor bonds must be filed with the Department of Revenue before work begins
  • Local contractor bonds should be filed with the specific city or town building department
  • Street opening bonds are filed with the local Department of Public Works

However, our partner surety companies can assist with the filing process upon request, helping ensure your bond is properly submitted to the correct authority.

How Are Claims Handled on a Massachusetts Contractor Bond?

If a contractor violates the law, fails to complete work, or causes damages, an affected party can file a claim against the bond. The surety company will investigate the claim and if it’s valid, will pay out up to the bond amount.

The contractor is then legally obligated to reimburse the surety company for any claims paid out. Unreimbursed claims can lead to difficulty obtaining bonds in the future and potential license revocation.

Frequently Asked Questions (FAQ)

Can I get a contractor bond with bad credit?
Yes, but you’ll likely pay a higher premium (5-10% of the bond amount). Some smaller bonds (like $5,000 local bonds) may still be obtainable for around $200-300 annually even with credit challenges.

What happens if I work without a required bond?
Working without a required bond can lead to penalties, permit denials, license suspension, and potential legal action. For out-of-state contractors, this could include tax liability issues with the Massachusetts Department of Revenue.

How often do I need to renew my bond?
Most license bonds are annual. If you plan to maintain a presence in a city, be sure to renew the bond on time each year to keep your local license active. Some bonds like the out-of-state contractor bond are project-specific.

What’s the difference between a bond and insurance?
A bond protects the public and the government against contractor non-compliance, while insurance protects the contractor against losses. Bonds require reimbursement if a claim is paid, whereas insurance typically doesn’t require repayment after a covered claim.

Ready to Get Your Massachusetts Contractor License Bond?

Our experienced team can help you secure the right Massachusetts contractor bond quickly and at competitive rates. Get started today with an instant online quote!

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