What a contractor license bond is
Some states, and many cities and counties, make contractors post a bond to get or renew a license. It protects customers, workers and the public if the contractor breaks the licensing laws, for example by abandoning a job or not paying workers. The contractor repays the surety for any claim it pays.
In Louisiana
The Louisiana State Licensing Board for Contractors requires a license applicant to show a net worth of at least $10,000. An applicant below that level must provide security for the shortfall under R.S. 37:2156.1.
- The statute lists a letter of credit as the security. Whether a surety bond is accepted was not confirmed from an official source.
- Some parishes and cities add their own bond rules.
You need this bond if you're
- A contractor applying for a new license
- A contractor renewing or reactivating a license
- A business changing its entity type or qualifier
- A contractor starting work in a city or county that requires its own bond
What the surety looks at
Basic business and owner details. Most license bonds need a credit check but no financial statements.