A contractor license bond is one of those costs nobody explains until the licensing board asks for it. It isn’t insurance, it doesn’t protect you, and in most states you don’t need one at all. But in the states that require one, you can’t get or keep a license without it, and the amount ranges from $1,000 to $500,000 depending on where you work and how big you are.
This guide covers every state and DC: who requires a license bond, how much, and what replaces it in states that use recovery funds instead. It also explains the other bonds contractors run into (bid, performance and payment bonds on public work) so you know which one someone is asking for.
Bond amounts come from the licensing agency or statute in each state, checked October and November 2026.
Quick answer: 8 states plus DC require a license bond from every licensed contractor or every contractor in a program: Alaska, Arizona, California, Nevada, New Mexico, Oregon, South Carolina (residential builders) and Washington, plus DC for home improvement. 7 more require bonds only from out-of-state contractors, roofers, NYC home improvement contractors, or at the board’s discretion. 35 states have no statewide license bond, and five of them use recovery or guaranty funds instead.
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How License Bonds Work
A license bond is a three-party promise. You (the principal) promise to follow the state’s contractor laws. A surety company guarantees that promise to the state (the obligee). If a customer or worker proves you broke the law, for example by abandoning a job or not paying for materials, they can claim against the bond, and the surety pays up to the bond amount.
The part that surprises contractors: the surety then comes after you. When you buy a bond you sign an indemnity agreement, so every dollar the surety pays out is a dollar you owe back. That’s the key difference from insurance. Insurance protects you; a bond protects your customers from you.
States use three approaches:
- A flat or tiered license bond. California ($25,000 for every license), Washington ($15,000 or $30,000), Oregon (by endorsement), Arizona (by annual volume), Nevada (set by the board), New Mexico ($10,000) and Alaska (by contractor type).
- A recovery or guaranty fund instead. Maryland, Massachusetts, Connecticut, Minnesota and Virginia pool contractor fees into a state fund that repays homeowners. You pay an assessment, not a bond premium.
- Nothing at the state level. 35 states have no statewide license bond, but cities often require one to register or pull permits, especially in Ohio, Colorado, Kansas, Missouri and Indiana.
States That Require a Contractor License Bond
The 8 states plus DC with a license bond for every licensee in the program, followed by states that bond only out-of-state contractors, single trades, NYC contractors, or applicants the board flags.
| State | Bond Amount | Who Needs It | Details |
|---|---|---|---|
| Alaska | $5,000–$25,000 | Every registered contractor | Handyman $5,000; specialty $10,000; GC $25,000 |
| Arizona | $2,500–$100,000 | Every ROC licensee | Set by annual volume; residential + Recovery Fund |
| California | $25,000 | Every CSLB licensee | +$25,000 qualifier bond; +$100,000 LLC worker bond |
| District of Columbia | $25,000 | Home improvement contractors | Contracts of $300+ |
| Nevada | $1,000–$500,000 | Every NSCB licensee | Set by monetary limit and finances |
| New Mexico | $10,000 | Every CID licensee | Required to get or renew |
| Oregon | $15,000–$80,000 | Every CCB licensee | Set by endorsement |
| South Carolina | $15,000 | Residential builders | Specialty bond on jobs over $5,000 |
| Washington | $15,000–$30,000 | Every registered contractor | Raised July 1, 2024 |
| Out-of-state, single-trade, local or discretionary bonds | |||
| Delaware | 6% of contract | Non-resident contractors | Contracts over $20,000 |
| Iowa | $25,000 | Out-of-state contractors | Filed with registration |
| Illinois | $10,000 | Roofers | Roofing license only |
| Oklahoma | Surety bond | Roofers | Roofing registration only |
| New York | $20,000 (or $200 Trust Fund) | NYC home improvement contractors | Suffolk can require up to $100,000 |
| Hawaii | Varies | When the board requires it | Based on financial review |
| Utah | Varies | When DOPL requires it | Based on financial responsibility |
Bid, Performance and Payment Bonds
A license bond is about your license. The other bonds contractors hear about are about a specific job:
- Bid bonds guarantee that if you win a public bid, you’ll sign the contract at your bid price.
- Performance bonds guarantee you’ll finish the job according to the contract.
- Payment bonds guarantee your subs and suppliers get paid, which matters because they usually can’t file a lien on public property.
On federal construction contracts over $150,000, the Miller Act requires performance and payment bonds. Every state has its own “Little Miller Act” for state and local public works with its own threshold. Private customers, especially commercial owners and general contractors, can require these bonds by contract too.
What a Contractor Bond Costs
You don’t pay the bond amount. You pay an annual premium, a percentage of the bond, based mostly on your credit. Contractors with strong credit commonly pay around 1% to 3% a year, so a $25,000 California bond often runs a few hundred dollars. Weaker credit or past claims can push premiums much higher, and some sureties will require collateral.
Two things move the price besides credit: the bond amount (Arizona’s and Nevada’s grow with your volume or monetary limit) and your claims history. A paid claim you didn’t reimburse can make you unbondable, which in a bond state means unlicensable.
Recent Changes
If you only read one section: Washington’s bonds more than doubled in 2024, Oregon’s went up in 2024, and California’s has been $25,000 since 2023. If you haven’t renewed since, your old bond may be too small.
Bonds more than doubled: Washington (July 2024)
Washington raised the general contractor bond from $12,000 to $30,000 and the specialty bond from $6,000 to $15,000 on July 1, 2024, with existing registrants phasing in at renewal.
Bonds raised by endorsement: Oregon (2024)
HB 2922 reset Oregon’s CCB bonds starting January 1, 2024: $25,000 for residential general contractors, $20,000 for residential specialty and $15,000 for limited endorsements, with commercial bonds from $25,000 to $80,000.
Bond raised to $25,000: California (2023)
SB 607 raised California’s contractor bond from $15,000 to $25,000 on January 1, 2023, and the bond of qualifying individual to $25,000 as well.
State-by-State Breakdown
Every state and DC. Red chips in the jump bar are states that require a license bond from every licensee in the program.
Jump to your state
Alabama No State Bond
There’s no statewide contractor license bond. The Home Builders Licensure Board (residential, over $10,000) and the General Contractors board (commercial, $100,000+) license without a bond, though public works jobs require performance and payment bonds.
Alaska $5,000–$25,000
Issuing Agency: Alaska Division of Corporations, Business & Professional Licensing
Bond amounts: $25,000 for a general contractor, $20,000 for a residential-only general contractor ($25,000 if you take any commercial work), $10,000 for specialty, mechanical and electrical contractors, and $5,000 for handymen (jobs up to $10,000).
Every contractor registers with the state, so every contractor posts a bond. Liability insurance is required on top of it.
Arizona $2,500–$100,000
Issuing Agency: Arizona Registrar of Contractors (ROC)
Residential: $9,000 for general residential contractors under $750,000 a year in volume ($15,000 above), and $4,250 for specialty residential under $375,000 ($7,500 above). Residential licensees also pay into the Recovery Fund or post a separate $200,000 bond.
Commercial: Scales with annual volume, from $5,000 to $100,000 for general commercial and $2,500 to $50,000 for specialty commercial (R4-9-112). Dual licenses post both amounts.
Bonds are set on your estimated annual volume, so raise the bond before your volume crosses the next tier.
Arkansas No State Bond
There’s no statewide contractor license bond. The Contractors Licensing Board licenses residential and commercial work on financial statements and experience instead.
California $25,000 (+ more)
Issuing Agency: Contractors State License Board (CSLB)
Contractor bond: $25,000 for every active license, raised from $15,000 on January 1, 2023.
Extra bonds: A $25,000 bond of qualifying individual when the qualifier owns less than 10% of the company, and a $100,000 worker bond for licensees organized as an LLC.
If your bond is cancelled or a final judgment against you goes unpaid, the CSLB suspends the license.
Colorado No State Bond
There’s no statewide contractor license bond. Denver and many other Colorado cities require contractor licensing, and some require a bond or proof of insurance to pull permits.
Connecticut Guaranty Fund Instead
No license bond. Home improvement contractors pay into the Home Improvement Guaranty Fund through their $220 annual registration and carry at least $20,000 in liability insurance.
Delaware Non-Residents Only
Issuing Agency: Delaware Division of Revenue
Out-of-state contractors: A surety bond, cash bond or letter of credit equal to 6% of any Delaware contract over $20,000. The business that hires a non-resident contractor files Form 5060 within 10 days.
Resident contractors need only the $75 annual business license.
District of Columbia $25,000
Issuing Agency: DC Department of Licensing and Consumer Protection (DLCP)
Home improvement contractors: A $25,000 surety bond with the Home Improvement Contractor license, which applies to residential contracts of $300 or more.
Florida No State Bond
There’s no statewide contractor license bond. State-certified and registered contractors prove financial responsibility through credit reports and, in some cases, a bond requested by the Construction Industry Licensing Board, but there’s no standard license bond.
Georgia No State Bond
There’s no statewide contractor license bond. Residential and general contractor licenses require insurance and financial proof, not a bond.
Hawaii At Board’s Discretion
Issuing Agency: Hawaii Contractors License Board
Hawaii licenses contractors on experience, exams and financial responsibility. The board can require a bond when an applicant’s finances fall short, but there’s no flat bond for every license.
Idaho No State Bond
There’s no statewide contractor license bond. Registration requires $300,000 in general liability instead.
Illinois Roofers: $10,000
Illinois licenses roofers only, and a roofing license requires a $10,000 surety bond. General contractors face no state bond, though Chicago and other cities may require one for licensing or permits.
Indiana No State Bond
There’s no statewide contractor license bond. Indianapolis and other cities require a contractor bond for licensing or permits, so check locally.
Iowa Out-of-State: $25,000
Issuing Agency: Iowa Department of Inspections, Appeals, and Licensing
Out-of-state contractors: A contractor whose home office is outside Iowa files a $25,000 bond with its registration, on the Division of Labor’s form, from an Iowa-licensed surety.
Iowa-based contractors register without a bond.
Kansas No State Bond
There’s no statewide contractor license bond. Johnson County, Wichita and other local programs may require bonds for licensing or permits.
Kentucky No State Bond
There’s no statewide contractor license bond. Cities and counties may require one for permits.
Louisiana No State Bond
There’s no statewide contractor license bond. The LSLBC licenses on financial statements and exams, and home improvement registration requires liability insurance.
Maine No State Bond
There’s no statewide contractor license bond.
Maryland Guaranty Fund Instead
No license bond for home improvement contractors. MHIC licensees pay a $100 Guaranty Fund assessment with a new license and $175 at each renewal, and the Fund repays homeowners for losses up to its limits.
Massachusetts Guaranty Fund Instead
No license bond. Home Improvement Contractors pay into the Guaranty Fund when they register: $100 for 0 to 3 employees, up to $500 for more than 30.
Michigan No State Bond
There’s no statewide contractor license bond. Residential builder and maintenance and alteration licenses require pre-licensure education and an exam, not a bond.
Minnesota Recovery Fund Instead
No license bond. Licensed residential contractors pay into Minnesota’s Contractor Recovery Fund with each license renewal, and the fund compensates homeowners for certain losses.
Mississippi No State Bond
There’s no statewide contractor license bond. The Board of Contractors licenses on financial statements and exams.
Missouri No State Bond
There’s no statewide contractor license bond. Kansas City, St. Louis and other cities may require one for licensing or permits.
Montana No State Bond
There’s no statewide contractor license bond. Contractor registration requires workers’ comp for employees.
Nebraska No State Bond
There’s no statewide contractor license bond. Registration requires workers’ comp for employees.
Nevada $1,000–$500,000
Issuing Agency: Nevada State Contractors Board
Bond amount: Set by the board at licensing, from $1,000 to $500,000, based on the license type, the monetary limit granted, and your financial history, experience and reputation. A cash deposit can substitute for a surety bond.
Residential contractors also fall under Nevada’s Residential Recovery Fund.
New Hampshire No State Bond
There’s no statewide contractor license bond.
New Jersey No State Bond
There’s no statewide contractor license bond. Home Improvement Contractor registration requires $500,000 per occurrence in general liability instead.
New Mexico $10,000
Issuing Agency: New Mexico Construction Industries Division
Bond amount: A $10,000 bond as proof of responsibility, required to get or renew a contractor’s license (NMSA 60-13-49).
New York NYC: $20K or Trust Fund
Issuing Agency: NYC Department of Consumer and Worker Protection
New York City: Home Improvement Contractors either pay $200 into the Trust Fund or post a $20,000 surety bond naming DCWP.
Counties: Suffolk County’s director can require a surety bond of up to $100,000 for licensed contractors. New York State itself has no contractor license bond.
North Carolina No State Bond
There’s no statewide contractor license bond. General contractor licenses ($40,000+ projects) are based on working capital or net worth by license class, not a bond.
North Dakota No State Bond
There’s no statewide contractor license bond. Licensing (jobs over $4,000) requires proof of liability insurance and workers’ comp.
Ohio No State Bond
There’s no statewide contractor license bond. Many Ohio cities require a contractor registration bond, commonly in the $5,000 to $25,000 range, so check each city where you pull permits.
Oklahoma Roofers Only
Oklahoma’s statewide contractor registration covers roofers only, and roofing registration requires a surety bond. Other trades face no state bond.
Oregon $15,000–$80,000
Issuing Agency: Oregon Construction Contractors Board (CCB)
Residential: $25,000 for residential general contractors and developers, $20,000 for residential specialty, and $15,000 for residential limited and restricted endorsements (home services, locksmith, home inspector, energy score, restoration).
Commercial: $80,000 for Commercial General Level 1, $55,000 for Commercial Specialty Level 1, and $25,000 for Level 2 and commercial developers.
Each endorsement also carries its own liability insurance minimum, from $100,000 per occurrence to $2 million aggregate.
Pennsylvania No State Bond
There’s no statewide contractor license bond. HICPA registration requires $50,000 bodily injury and $50,000 property damage coverage, and Philadelphia and other cities have their own licensing.
Rhode Island No State Bond
There’s no statewide contractor license bond. Registration requires $500,000 in liability insurance.
South Carolina $15,000 Builders
Issuing Agency: South Carolina LLR (Residential Builders Commission)
Residential builders: A $15,000 bond, or proof of financial responsibility acceptable to the commission.
Residential specialty contractors: A surety bond is required once a job for a single owner exceeds $5,000 (S.C. Code 40-59-220). Commercial licenses under the Contractor’s Licensing Board use financial statements or bonds by license group.
South Dakota No State Bond
There’s no statewide contractor license bond.
Tennessee No State Bond
There’s no statewide contractor license bond. Contractor licenses ($25,000+ projects) are based on financial statements that set your monetary limit.
Texas No State Bond
There’s no statewide contractor license bond. Some Texas cities require a bond or registration for permits, and public works jobs over $25,000 need payment bonds.
Utah Only If Required
Issuing Agency: Utah Division of Professional Licensing (DOPL)
Utah has no flat license bond. DOPL can require one when an applicant’s financial responsibility is in question, and licensees contribute to Utah’s residence lien recovery fund instead. Check with DOPL if you’re asked for one.
Vermont No State Bond
There’s no statewide contractor license bond. Residential contractor registration requires $1,000,000 / $2,000,000 in liability insurance instead.
Virginia Recovery Fund Instead
No license bond. Virginia licensees pay into the Contractor Transaction Recovery Fund, and Class A and B licenses add net-worth requirements.
Washington $15,000–$30,000
Issuing Agency: Washington Department of Labor & Industries
Bond amounts: $30,000 for general contractors and $15,000 for specialty contractors, up from $12,000 and $6,000 on July 1, 2024. Existing registrants phase in the new amounts at renewal.
Registration also requires $200,000 public liability plus $50,000 property damage coverage, or a $250,000 combined single limit.
West Virginia No State Bond
There’s no statewide contractor license bond. Licensing (residential $5,000+, commercial $25,000+) requires exams and insurance.
Wisconsin No State Bond
There’s no statewide contractor license bond. The Dwelling Contractor credential for permit-pullers requires proof of financial responsibility (liability insurance or a bond).
Wyoming No State Bond
There’s no statewide contractor license bond. Cheyenne, Casper and other cities may require a bond for local contractor licenses.
Bond amounts are from each state’s licensing agency or statute, checked October and November 2026. Local bond requirements change often and vary by city, so check with the permit office where you work.
When Someone Files a Claim Against Your Bond
- Who can claim: Usually homeowners and customers harmed by a violation of the contractor law, and in some states workers and suppliers you didn’t pay. The surety investigates before paying.
- What happens next: If the surety pays, it will ask you to reimburse it under your indemnity agreement. If you don’t, it can sue you, cancel your bond, or both.
- What it does to your license: In bond states, a cancelled bond means a suspended license until you replace it, and a history of claims makes replacement bonds expensive or impossible. California, for one, suspends a license when the bond lapses or a final judgment goes unpaid.
- Best defense: Written contracts, change orders in writing, and paying subs and suppliers on time. Most bond claims start with a payment dispute.
Running the Business
- Licensing first. General contractor license requirements by state and home improvement contractor license by state cover the licenses these bonds attach to.
- Insurance is separate. Contractor insurance requirements by state breaks down liability and workers’ comp minimums.
- Trade-specific rules. See roofing license requirements by state for the states that bond roofers.
- Invoice the same day. Our free invoice generator for trades keeps paperwork clean, which is half of avoiding bond claims.
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FAQ
Which states require a contractor license bond?
Alaska, Arizona, California, Nevada, New Mexico, Oregon and Washington require a license bond from every licensed or registered contractor, South Carolina requires one from residential builders, and DC requires one from home improvement contractors. Delaware and Iowa bond out-of-state contractors, Illinois and Oklahoma bond roofers, and New York City home improvement contractors post a bond or pay into a trust fund.
How much is a contractor license bond?
It depends on the state: $10,000 in New Mexico, $25,000 in California, $15,000 or $30,000 in Washington, $15,000 to $80,000 in Oregon depending on endorsement, $2,500 to $100,000 in Arizona depending on annual volume, and $1,000 to $500,000 in Nevada as set by the board. You pay an annual premium, often around 1% to 3% of the bond amount with good credit.
Is a contractor bond the same as insurance?
No. Insurance protects you. A bond protects your customers, and if the surety pays a claim, you owe the money back under the indemnity agreement you signed when you bought the bond.
What happens if someone files a claim against my bond?
The surety investigates and, if the claim is valid, pays the customer up to the bond amount, then asks you to reimburse it. If you don’t, the surety can sue you and cancel the bond, and in bond states a cancelled bond means a suspended license until you replace it.
Do I need a bond if my state doesn’t require one?
Possibly. Many cities require a bond to register or pull permits, public works jobs require bid, performance and payment bonds (federal jobs over $150,000 under the Miller Act), and commercial owners or general contractors can require bonds by contract.
What is a recovery fund?
Some states, including Maryland, Massachusetts, Connecticut, Minnesota and Virginia, collect fees from licensed contractors into a state fund that repays homeowners harmed by licensed contractors. In those states you pay an assessment instead of buying a license bond.
Bottom Line
If you work in Alaska, Arizona, California, Nevada, New Mexico, Oregon, Washington, South Carolina (residential builders) or DC, the bond is part of the license: no bond, no license. Check that your bond still matches the current amount, especially in Washington, Oregon and California, where amounts went up recently.
Everywhere else, the state probably won’t ask for a bond, but your city, a public owner or a commercial general contractor might. And wherever you work, remember what a bond really is: a promise you’ll pay back anything the surety pays out for you.
