Contractor Bond Washington State
Most businesses that provide services under contract in Washington State need to be bonded. A contractor bond Washington State ensures that these businesses offer high-quality services to customers and are held accountable for their services.
In addition, the Washington State government would want to make sure that businesses operating within the state adhere to established guidelines and regulations.
As a result, getting licensed and bonded in Washington State is important for any business. And because most businesses in today’s economic environment work mainly via contracts, it is important for these contracts to be backed by contractor surety bonds to protect the customer from incurring damages as a result of poor services delivered. The bond also protects the business itself from incurring hefty costs from customer claims when they fail to fulfill the terms of the contract.
What are Contractor bonds?
A contractor surety bond Washington is a type of surety bond that is designed for contractors. A contractor is basically any type of business that operates primarily by issuing a contract to a customer. The contract stipulates that the business will deliver a specific service and that the customer will pay a specific amount.
Contractors include businesses such as construction companies, electricians, plumbers, general contractors, among others. In most cases, a customer who approaches a contractor to request for a particular service will want to ensure that the business actually adheres to the terms of the contract.
Therefore, a surety bond issued by the contractor (in this case the principal) to the customer (the obligee) offers a level of protection to the obligee and the principal. First off, the obligee can make a claim against the bond in the event that the contract is not properly adhered to. For example, a construction company may carry out a below standard job on a project, or a plumber/electrician may not fix the appliances in a home to the expectations that were agreed upon.
Secondly, for any business owner, contractor bonds provide a much-needed cushion against damages that can arise when you’re unable to fulfill the terms of a contract that you signed with the customer.
Contractor Surety Bond Washington
There are 3 main types of a contractor surety bond Washington. These include:
- Construction bonds
A construction bond is a type of surety bond that is issued by a construction company to the owner of a building project. The primary purpose of the bond is to ensure that the construction company completes the project to the required standards.
For a contractor bond Washington State, the state government may want to protect public funds from being squandered by a negligent contractor. This makes it necessary for any contractor working on a public construction project that costs $150,000 or more to issue a construction bond.
- Contractor license bonds
For any business that requires a license from the Washington state government in order to operate, they will also most likely be required to have a contractor license bond. This surety bond protects the customers of plumbers, insurance brokers, vehicle dealers, electricians, etc., against negligence in the services that they receive.
The bond also protects the state from any damages that are caused by a licensed contractor who fails to operate within the established regulations of their particular industry.
- Fidelity bonds
A fidelity bond is a type of contractor surety bond Washington that is issued by businesses to protect against the actions of their negligent employees. Businesses in Washington that assign employees to work in a home or to deliver a specific service are at risk of damages caused by those employees. The fidelity bond allows such businesses to cover themselves from these risks.
Washington Contractor Bonds and Rates
The rates of different types of contractor surety bonds Washington vary with the type of business and the bond that will be required. The following is a breakdown in prices of some of the most commonly issued contractor bonds.
Electrical and telecommunications companies operating in Washington are required to obtain a contractor bond. The bond protects customers against negligent services of the contractor, in addition to protecting the state from incurring damages as a result of electricians who go against the Washington state code. Bonds for electrical contractors are required in the amount of $4000.
For businesses that offer any other type of service that involves the signing of a contract (general contractors), the state requires a bond of $12,000 to be issued.
Specialty contractors are also required to post a $6000 bond before they begin conducting any business.
Fire Sprinkler system contractors
Contractors who install fire sprinklers in premises are required to post a $10,00 surety bond. This is because the work of these contractors is so critical. The sprinkler systems that they install are what property owners rely on when a fire breaks out.
Any substandard job that is carried out may potentially result in extensive damages to the customer. As a result, the bond protects the customer from damages and the company from hefty claims.
The contractor bond amount required of side sewer contractors varies according to your location within the state. If your side sewer business is based in Milton, a $500 surety bond is typically required. For contractors based in Seattle, a $30,000 surety bond is required.
Why is it important to be bonded in Washington?
Getting licensed and bonded in Washington State is important not only for the operations of your business but also to ensure that you abide by state laws. A contractor bond Washington State will ensure that your business is covered against the risk of hefty claims made by dissatisfied customers. It will also protect your business from any damages carried out by employees while working for your company. Whether you need a bid bond, or payment and performance bond, we can take care of your business needs.
Getting Licensed and Bonded in Washington State
If you are ready to get a contractor bond, you need to contact NFP Surety today. We have an easy bonding process, that can as simple as a brief credit check. Some larger bond amounts will take a little more information. Quotes are always free with no obligation to buy. Let us show you ow to get bonded as a contractor in WA, today!