As of January 1, 2016, the required amount of a contractor’s bond will again increase from $12,500 to $15,000. Contractor bonds are required for the issuance of an active license, reactivation of a license, and for the maintenance of any actively renewed license. The $2,500 increase is the result of Senate Bill 467, which was approved by the Governor on October 8, 2015. Previously, an applicant was also required to provide evidence of financial solvency. However, this requirement has been removed and instead, the amount of the bond was increased to $15,000. Although the amount of the contractor’s bond will increase, the amount of a qualifying individual will remain at $12,500.
For contractors whose bonds do not expire on December 31, 2015, the Board is requiring an endorsement authorizing the increase that must be signed by an attorney-in-fact for the surety company. This endorsement will have no bearing on the effective date of the bond, so contractors should remain aware of the date that the bond expires, at which point it will need to be renewed. As a result of the increase, applicants should expect to pay a slightly higher premium for their bond. Failure to file a bond or increase endorsement timely may lead to suspension or revocation of current licenses. As such, contractors should allow plenty of time for the Contractors State License Board to process the bonds and endorsements to ensure that there is no lapse in coverage.