Wondering how to get your contractor’s license? Below, we review the six steps involved, the role of surety bonds, and how licensing requirements differ by state.
Keep reading to learn how to obtain your contractor’s license and how BOSS Bonds can help you secure the right bond quickly so you can start your construction career with confidence!
If you’re ready to launch your contracting career, getting licensed is a crucial step. Your license supports your:
One of the most important licensing requirements is securing your contractor license bond.
Read More: The Important Role of Surety Bonds in Professional Licensing
Every state has its own licensing rules. Some states regulate almost every type of construction work, while others only require licensing for certain trades or project sizes. Thus, the first step is determining whether you really need a contractor’s license.
In most states, you’ll need a contractor’s license if you:
Some states also have different requirements for general contractors and specialty contractors. Reviewing your state licensing board's rules in advance can help you avoid costly penalties down the line.
Once you confirm that you need a contractor’s license, the next step is making sure that you satisfy your state’s eligibility requirements. Most states require you to:
Some states may also require proof of financial stability or the designation of a qualifying agent if you’re applying as a corporation.
During your licensing application, you’ll need to submit several documents that prove your qualifications, verify your identity, and confirm your business structure.
To speed things up, make sure you have the following items on hand before you begin:
Incomplete applications are one of the leading causes of licensing delays, so double-check your submissions and ensure you include all of the necessary documents.
Some states require contractors to pass exams to secure their license. Two common types of exams include:
If your state requires an exam, you can often find helpful study guides, online practice tests, and approved testing center locations on your state licensing board’s website.
Pro tip: If your state accepts the NASCLA Accredited Examination, passing this test can qualify you for licenses in multiple states, saving you the time and cost of retaking separate exams.
Most states won’t issue your contractor license until you secure a contractor license bond, which is a surety bond that protects your clients and your state licensing agency from financial harm due to your negligence or noncompliance. Your state sets your required bond amount.
When you apply for your contractor license bond, the surety company will review your character, capital, and work capacity. They use this information to set your bond premium, which is the amount you’ll pay to secure the bond. Premiums typically range from 1% to 3% of the total bond amount.
Once you pay your premium, you must file your contractor license bond with your state licensing agency. As a bonded contractor, you’ll be expected to:
If you fall short of these obligations, project owners and state regulators can file a claim against your bond. Your surety provider will investigate the claim, pay them accordingly, and seek reimbursement from you shortly after.
Read More: The Essential Role of Surety Bonds in Keeping Your Contracting Business Compliant
Many people conflate surety bonds with insurance. However, they work very differently.
Once your application, exam results, and bond application are approved, your state will issue your contractor’s license. Your license will remain valid for one to two years. After that, you’ll need to renew it to keep it active.
To showcase how much state licensing requirements can vary, let’s take a look at the rules for the five states with the highest construction demand.
In California, contractors who work on projects worth more than $1,000 must obtain a $25,000 contractor’s license bond. The specific bond type and license classification depend on the type of work they perform.
California’s contractor license classifications are as follows:
Read More: Navigating Public Works Bonding Requirements in California
Texas doesn’t require all general contractors to obtain a license. Instead, the state reserves its licensing requirements for specialty trade contractors, such as those who work on HVAC, electrical, or plumbing projects. Specific bond requirements vary by trade and municipality.
In Florida, licensing requirements are more complex. Most contractors must obtain a state certification and local registration, but a license bond is only required for contractors with credit scores below 660.
Arizona’s contractor licenses are regulated by the Registrar of Contractors (ROC). This agency requires contractors to obtain license bonds ranging from $2,500 to $100,000, depending on their license type and project volume.
North Carolina only requires licenses for contractors who work on projects worth over $40,000. While some contractor license classifications don’t require bonding, securing a surety bond may still expedite your license approval.
Note: No matter which state you work in, licensing rules are always subject to change, so verify your requirements with your state licensing board.
Read More: How Smart Financial Planning Helps Contractors Win Bigger Projects and Drive Growth
Contractor licenses aren’t valid forever—you usually need to renew yours every one to two years. Along with your license, you must renew your surety bond, insurance, and business registration on time to stay compliant.
You must also update your state licensing board any time your business name, address, or ownership changes and complete any required continuing education courses.
Missing key renewal deadlines can put your license at risk and interrupt your business operations. At BOSS Bonds, we help you stay compliant by sending you automated renewal reminders and streamlining your bond continuation certificate.
If you’re eager to get your construction business up and running, BOSS Bonds has you covered! We’ll get you bonded quickly so you can secure your contractor’s license and start building your business.
NASCLA. Accredited Examinations FAQ.
https://www.nascla.org/nascla-accredited-examinations-faq
CSLB. What Kind of Contractor Do You Need?
https://www.cslb.ca.gov/Consumers/Public_Works/What_Kind_of_Contractor_Do_You_Need.aspx
CSLB. A Guide to Contractor License Bonds.
https://cslb.ca.gov/Resources/GuidesAndPublications/ContractorsLicenseBondsGuide.pdf
CSLB. CSLB Licensing Classifications.
https://www.cslb.ca.gov/about_us/library/licensing_classifications/
Next Insurance. Texas general contractor license and insurance requirements.
https://www.nextinsurance.com/blog/texas-general-contractor-license-and-insurance-requirements/
Arizona Registrar of Contractors. Bond Information.
https://roc.az.gov/bond-information
North Carolina General Assembly. Chapter 87: Contractors.
https://www.ncleg.net/enactedlegislation/statutes/html/bysection/chapter_87/gs_87-1.html