How much does a contractor bond cost in Alaska?
The Alaska Department of Commerce, Community and Economic Development’s Division of Corporations and Business and Professional Licensing requires contractors to post surety bonds as part of the licensing process to operate in the state. The required bond amount depends on the license type:
- General Contractor License Bond: $25,000
- General Contractor License Bond (residential work only): $20,000
- Mechanical Contractor and Specialty Contractor License Bonds: $10,000
- Handyman Contractor License Bond: $5,000
The surety company issuing the bond determines your premium rate, which is the percentage of the total bond amount you pay as the premium. During the application process, the surety company evaluates your personal credit, financial statements, industry experience, and licensing history.
EZ Surety can issue premiums for Alaska contractor license bonds for as low as 1% of the total bond amount for applicants with standard credit. If your credit is below average, we can still offer a competitive rate for your contractors license bond.
Why are contractor bonds important in Alaska?
Contractor license bonds hold licensed contractors accountable for the quality of their work and protect the public from damages they’ve incurred due to the contractor’s violation of licensing laws.
When the surety company issues the bond, they provide a financial guarantee to the state that the contractor will comply with the regulations set forth in AS 08.18. If the contractor violates these regulations, causing a loss to the consumer, the consumer can file a claim against the bond.
If the claim is valid, the surety company will cover the costs to repair the damage up to the amount of the bond. The contractor is then liable to reimburse the surety company for all damages paid.
How do I get my general contractor’s license in Alaska?
To obtain your general contractor’s license in the state of Alaska you must meet the Department of Commerce, Community and Economic Development’s Division of Corporations and Business and Professional Licensing requirements by completing the following steps:
- Complete the license application form
- Provide proof of general liability insurance and workers’ compensation insurance
- Pass the business and law exams
- Complete the pre-license course requirement
- Pay the $100 application fee and $250 license fee
- Post the appropriate surety bond