Quick Facts:

  • Regulating Agency: Vermont Department of Public Safety – Division of Fire Safety
  • Required Bond Amount: $20,000 (for plumbing contractors)
  • Cost Range: $200-$2,000 annually (depending on credit)
  • Required For: Plumbing contractors (not required for general contractors or electricians)

What Is a Vermont Contractor License Bond?

A contractor license bond is a type of surety bond that serves as a financial guarantee that the contractor will comply with state laws, building codes, and ethical standards. It protects the public and clients from fraudulent or faulty work by providing a source of compensation if the contractor violates regulations or fails to fulfill contractual obligations.

Who Regulates Vermont Construction Contractor Licensing?

The Vermont Department of Public Safety – Division of Fire Safety is the primary state agency for trade licensing in Vermont. It houses the Plumbers’ Examining Board and the Electrical Licensing Board, which license plumbers and electricians statewide. The Vermont Office of Professional Regulation (OPR), under the Secretary of State, manages the Residential Contractor Registry for general contractors.

What Bond Amount Is Required in Vermont?

The standard contractor license bond amount for Vermont plumbers is $20,000. This is a fixed amount set by the state as the maximum penal sum of the bond. Vermont does not require a state general contractor license or bond, and consequently there is no state-required general contractor license bond. Electricians are licensed at the state level, but no surety bond is required to obtain an electrical license.

How Much Does a Contractor Bond Cost in Vermont?

The cost of a $20,000 plumbing contractor bond will depend on credit and financial history. Surety bond premiums typically range from 1% to 10% of the bond amount per year. A plumbing contractor with good credit might pay around $200 to $600 annually for a $20,000 bond, while one with credit issues might pay $800 or more per year.

Factors affecting cost:

  • Credit score
  • Business financial history
  • Years in business
  • Prior claims history

Who Needs a Contractor License Bond in Vermont?

Licensed plumbing contractors (master plumbers/businesses) in Vermont must obtain a contractor license bond as part of operating legally. The bond is required at the time of licensing or license renewal.

Vermont does not require bonds for:

  • General contractors (no state license requirement)
  • Electricians (licensed but not bonded)
  • HVAC contractors (no state license)
  • Most other specialty contractors

What Other Contractor Bonds Are Required in Vermont?

While Vermont doesn’t require general contractor license bonds at the state level, bonds may be required in specific scenarios:

  • VTrans requires contractors performing work in public rights-of-way to secure bonds ranging from $1,000 up to $100,000
  • Some municipalities have bonding rules for building permits or city contracts (e.g., Burlington requires contractors to post a performance bond equal to the project cost for construction jobs valued over $6,000)
  • Project-specific performance and payment bonds for public construction projects

How Does ContractorNerd’s Application Process Work?

The process for obtaining a contractor license bond in Vermont is straightforward:

  1. Determine the exact bond type and amount required by checking with the licensing agency
  2. Contact a surety bond provider that operates in Vermont and complete their bond application
  3. Receive a quote based on your credit score and business profile
  4. Pay the premium and receive your bond document

How Quickly Can I Purchase a Bond?

For common license bonds like the $20,000 plumbing contractor bond, the process is typically quick and straightforward, often completed in a matter of minutes online. Many surety companies have online platforms that approve bonds instantly for credit scores above a certain threshold, making it easier than ever to get bonded.

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

After receiving your bond, you must file it with the appropriate agency. For a plumbing license bond, include it with your license application paperwork or license renewal submission to the Plumbers’ Examining Board. Make sure it’s submitted before any deadline and follow up to ensure they have received and accepted it.

How Are Claims Handled on a Vermont Contractor Bond?

If a bonded contractor causes damage or breaks the law (for example, by not following building codes), an affected customer or entity can make a claim against the bond. The surety will pay out damages up to the bond’s amount, and the contractor must then reimburse the surety. This holds contractors financially accountable and helps build public trust in the industry.

Frequently Asked Questions (FAQ)

What if I have bad credit?

Even with credit challenges, contractors can still obtain bonds, but they’ll likely pay higher premiums. Some surety companies offer financing or special programs for contractors with credit challenges. With poor credit, you might pay closer to 5-10% of the bond amount.

What are the penalties for not having a required bond?

Operating without a required bond (such as the plumbing contractor bond) is illegal and could result in license suspension, fines, and the inability to legally work in your trade.

How do bond renewals work?

Most license bonds need renewal annually or biannually, aligned with your license period, by paying the premium again. The surety will usually send renewal notices when it’s time to renew.

What’s the difference between a bond and insurance?

A bond is not insurance for the contractor but a guarantee for others – the contractor remains liable to repay any claims paid by the surety. Insurance, on the other hand, protects the contractor from certain types of losses and typically doesn’t require repayment of claims.

Ready to Get Your Vermont Contractor License Bond?

Apply Now