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What Is A Contractor’s License Bond & Do You Need It?

Clients like to have trust in the people they are hiring, and that goes for every single industry. If your clients don’t trust you, they’ll be plotting to replace you, and they’ll replace you at some point, after they’ve found someone who is more trustworthy than you. Even if you have the best services, lack of trustworthiness will throw you into the background and you’ll essentially make way for your competitors to swoop in and steal your clients.

I guess that doesn’t surprise you, does it? If you put yourself in the shoes of your clients, you’ll quickly realize that you’d do the same thing and that working with untrusted companies isn’t on your list of goals. In fact, it is very high on your list of things to avoid. So, if you’re thinking that way, you can be sure that your clients are as well, and that instilling trust is what will make a difference between a successful firm and a struggling one.

Sure, there are much more factors that will play a role in your overall success, but trust is our focus for the day, so let us stick with it. It’s clear that you want people to trust you, but here’s what might not be that clear. How can you get them to? Do you think that repeating the words “trust me” to them over and over again will have any kind of a positive influence on their opinions? Highly unlikely that something like that will happen, so stop badgering them with words and start taking actions.

Clients need much more reassurance than words. They need actions, as hinted at already, and they need you to take the right ones. It’s always been correct that actions speak louder than words, and that’s a fact that you should never forget when you want to get and keep clients. Which actions should you take in this specific case, though? Well, there’s one that I want you to get familiar with right now.

What Is A Contractor’s License Bond?

Is there a better way to show your clients you mean serious business than to have tangible proof of it? They can’t tell what’s on your mind, but they’ll feel much more reassured if you put at least a little bit of that in writing. And, no, I’m not saying you should write your intentions down on a piece of paper, add your signature and be done with it. That’s not exactly reassuring, is it?

Having a contractor’s license bond, on the other hand, is quite reassuring! As you’ll see at, you’ll need to buy these bonds, and the great thing is that you can find them at different rates, meaning that there’s something out there for everyone, regardless of the size of your company. Having no bond costs nothing, if you’re just looking at the surface. If you dig a bit deeper, though, you’ll see that it costs you clients, and that’s the highest price to pay.

A contractor’s license bond basically allows your clients, and the public, to place a claim for financial compensation if you don’t fulfill your end of the bargain, i.e. if you don’t do the work that you’re required to do by a contract that you’ve signed. It is a legally binding contract, so there’s no way around it and you WILL get in trouble if you try to ignore the agreement you’ve made with the client. This is how you can put your thoughts in writing, if you remember me saying that above, and the clients will trust these bonds much more than your words, which is completely normal.

Do You Need It?

You know what’s in it for your clients and for the public, but you could be confused about one thing now. What’s in it for you? Is getting this bond really necessary if all it does is reassure people that you’ll do the work you agreed on doing? I get why this question may be bothering you, but trust me on this one – getting a contractor’s license bond is important for you as well, for several reasons.

First and foremost, you won’t get a license if you don’t have the bond first, as that’s how the law works. States and even cities can have their own bond requirements, as they’re acting in the best interest of the public, and they want to protect people against any and all fraudulent work that someone might be trying to sell. So, since the state agencies will require you to have this bond, getting your contractor’s license by ignoring the requirements, as those found on this website, won’t be possible. That’s reason number one why you need these.

Reason number two is a bit more subtle, but we could argue that it is even more important. The surety company that you’ll enter into agreement with will function as a sort of an intermediary between you and your client, guaranteeing the other party that you’re financially capable of paying the bond. Thus, it guarantees that you’ll do the work and that people will get compensated if you don’t. That’s all the security that clients need, meaning that they’ll be ready to work with you if you offer them such security and assurance. Getting clients and keeping them has to be your goal as a business owner, and contractor’s license bonds make that easier.

How To Get It?

You’re no longer questioning the necessity of getting this bond, but you’re surely wondering how to get the best one. It’s clear that surety companies are the ones you’ll have to work with, and it’s, thus, clear that you have to focus on finding the one that will offer you the most amazing option. Well, that might be trickier to say than to do, which is why working with a broker that can search for those perfect options on your behalf is your best shot. Brokers will have your best interest in mind, and they’ll work towards finding you the best bonding solution.