Utah Contractor Bond
Getting a contractor license bond in Utah is necessary for any contractor who desires to conduct business within state borders, and it is required by the state of Utah as a protection for customers who avail themselves of services provided by that contractor. Specifically, a Utah contractor bond is considered essential by the state because it will tend to enforce compliance with the requirements listed in Title 58 of the Utah Construction Trades Licensing Act.
Any contractor who subverts or violates the requirements listed in Chapters 1 or 55 of Title 58 will be considered to be guilty of non-compliance, and any contractor who causes a client to experience some kind of financial setback as a result of faulty service would be subject to the consequences of bond violation. A customer who feels that a contractor has violated the terms of an agreement could potentially file a claim against the contractor license surety bond, and assuming the claim were found to be valid, that customer could then receive the amount of a claim made.
How do contractor license bonds in Utah work?
An applicant for a Utah contractor bond would have to contact the state for the appropriate application form and submit all required documentation, as well as the fee for applying. The actual Utah contractor bond would be issued by a surety company which specializes in insurance and bonds, and this application is also the responsibility of the contractor.
In the actual terminology of a contractor bond, the contractor would be considered the principal, and the company which issues the bond is known as the surety, while the state organization requiring the bond is known as the obligee. In the event that any customer feels that a violation has occurred of the agreement between himself/herself and the contractor, such that financial losses have been sustained, he/she would be within rights to make a claim against that surety bond, to recover the amount of any damages.
Initially, the surety company would be obliged to pay the amount of a valid claim, after which it would more than likely attempt to recover that amount from the principal who violated terms of the bond.
Contractor Bond in Utah
Do all contractors need to post a contractor license bond Utah?
To be absolutely sure about whether or not you as a contractor are required to purchase a Utah contractor bond, it will be necessary to verify that with the Division of Occupational and Professional Licensing within the state. Generally speaking however, all general building contractors, all general engineering contractors, and both residential and commercial contractors will have to be bonded according to state requirements.
In all, there are upwards of 30 different types of professional contractors who are obliged to obtain a Utah contractor bond, so it is more than likely that if you are a professional contractor in Utah, you will need to obtain a contractor bond in order to conduct business.
Cost of a UT contractor bond
There are a few elements which go into the overall calculation for the cost of a contractor license surety bond in Utah, and the amount of the bond actually represents the total compensation which could potentially be paid out to a claimant. The actual cost of a Utah contractor bond will generally be between 1% and 3% of the face value amount of the bond, but that figure can be shifted upward or downward by a couple other factors.
For one thing, your credit score as a contractor is very important in determining the cost of your monthly premiums on a bond. If you have fairly poor credit history, you will more than likely have to pay premiums at the high end of that scale, because you will be considered more likely to default in the event of any claim made against the bond.
Your financial stability is also a factor considered by the surety company issuing the bond, because that’s another indicator of the potential for you to default, should any claim be made. The total amount of the bond itself, upon which the 1% to 3% month premiums will be based, will be arrived at by determining the annual volume of business that your company does in a typical year. For instance a large company which does $150,000 worth of business would probably need a surety bond in the approx. amount of $150,000.
Where you can get a Utah contractor license bond
There are many agencies throughout the country which sell various types of insurance and bonds, but not all of them are licensed to do so in the state of Utah. When searching for an appropriate surety company to purchase your bond from, you should first make sure that the company is authorized to sell insurance and bonds in the state of Utah.
After that, it’s probably a good idea to do some comparison shopping, to see what kind of a monthly rate you can get on your bond premiums. One company which is extremely affordable and is authorized to sell insurance and bonds in every state in the country is NFP Surety. Not only is NFP Surety one of the largest sellers of insurance and bonds in the US, but it has also established a reputation for being one of the most affordable as well as one of the fairest and most reliable companies to do business with.
As one example of the company’s flexibility, if you are having difficulty securing a contractor bond because of poor credit history, you may still be able to work with NFP Surety representatives to get the bonding you need. If you are under a bit of time constraint, you can go directly to the NFP Surety website and fill out an online application right there. Once your application has been reviewed, the whole process can be expedited by the streamlined NFP Surety process, so that you can receive the bonding you need in the shortest possible time frame.