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 Wisconsin
A business that pulls building permits for one- and two-family homes in Wisconsin needs a Dwelling Contractor certification from the Department of Safety and Professional Services. Under Wis. Stat. § 101.654 it must show financial responsibility with either a surety bond of at least $25,000 or general liability insurance of at least $250,000 per occurrence.
- A Dwelling Contractor Restricted certification is issued to an applicant with a bond under $25,000; that contractor may not take on a dwelling job whose estimated cost is more than the bond amount (Wis. Stat. § 101.654(2m)).
- The bond or policy cannot be cancelled without 30 days' written notice to DSPS.
- Owners who live or will live in the dwelling and pull their own permit are exempt.
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.