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What are Bonding Requirements for Florida Contractors?

Written on December 12, 2018

Florida construction projects usually involve hundreds of thousands – even millions – of dollars in materials and labor. There is a lot of money at stake for municipalities, general contractors, owners, developers, and subcontractors. In addition, these projects are extremely complex and even minor errors can be costly. For these reasons, construction companies are required to obtain a bond to protect the interests of all entities involved in the project. The bond is a type of insurance policy, guaranteeing that the contractor will uphold its end of the bargain.

However, Florida contractor license bonds are much more complex than the description an analogy provides. A Florida construction law attorney can explain in more detail, but a synopsis may be useful.

Overview of Florida Contractor License Bonds

All general contractors and subcontractors must obtain a contractor license bond from the Construction Industry Licensing Board, which falls under the Florida Department of Business and Professional Regulation.

Plus, there are requirements in order to provide services in Florida counties, cities, and other municipal districts. The exact requirements are usually defined by the building code of the municipality, but the nature of the bond is to provide surety. The company obtaining the contractor license bond guarantees compliance with building code regulations and the specific terms of the bond.

If the licensee fails to adhere to the conditions, the municipality has the right to seek the bond amount as damages. The arrangement is intended to avoid expensive, time-consuming contract disputes that can arise in construction projects.

Bonding Requirements for Clearwater, FL and Pinellas County

There are dozens of contractor license bonds required in different parts of Florida, which can range up to $25,000 or more. However, for Clearwater, FL and most of Pinellas County, the required bond amount is $5,000. You do not pay that amount to purchase surety coverage, however. The fee for obtaining the bond is payable to the insurer, much like an insurance premium.

Additional Bond Requirements May Apply

Depending on the specifics of the project and your company, there may be other bond requirements to consider. For instance:

  • You may need a Florida Construction License Bond based upon the applicable credit score. State law requires all construction contractors to obtain this bond if the person responsible for a company’s financial matters has a FICO score under 660 points.
  • A bid bond may be required by the property owner or developer during the project bidding process. This type of bond provides insurance that your company, as the bidder, will honor the terms of the bid. The owner or developer can seek compensation if you do not comply with bid requirements.

Consult with a Florida Business Attorney Regarding Bonding Requirements

A business law attorney can provide additional assistance with bonds, as the terms can be complicated when you are trying to focus on a construction project. For more information on contractor bonds, please call (727) 785-5100 to reach Clearwater Business Law. We can schedule a consultation with a contracts and business lawyer who can explain how bonds work in Florida, Pinellas County, and Clearwater, FL.


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