Who this applies to
A South Carolina license does not bring a bond with it automatically. Whether one is needed depends on the kind of license and, in some cases, on whether the contractor picks a bond over another way of showing its finances.
Residential builders. An applicant for a residential builder's license submits an executed bond of not less than $15,000 [2], on a form and with a surety the Residential Builders Commission approves. The same provision accepts proof of financial responsibility that satisfies the commission, so a builder who can offer that proof is not held to the bond.
Residential specialty contractors. Registration does not trigger a bond; a job does. When the cost of an undertaking for an individual property owner goes above $5,000 [2], the specialty contractor obtains a bond with a surety, in an amount the commission approves. The code attaches no dollar figure of its own to that bond.
Commercial general and mechanical contractors. Section 40-11-260 [1] calls for a financial statement showing a minimum net worth or working capital for each license group. An applicant or renewing licensee that does not file a qualifying statement may post a surety bond instead, in the same amount as the net worth its group requires:
- General contractors: $20,000 [1] for Group One, $60,000 [1] for Group Two, $150,000 [1] for Group Three, $250,000 [1] for Group Four and $350,000 [1] for Group Five.
- Mechanical contractors: $7,000 [1] for Group One, $15,000 [1] for Group Two, $30,000 [1] for Group Three, $60,000 [1] for Group Four and $300,000 [1] for Group Five.
What the rule says
On the commercial side the bond works as a swap. Section 40-11-262 [1] lets an applicant replace the financial statement with a bond from a surety authorized to transact surety business in South Carolina, pegged to its group's net-worth figure. That bond has to be continuous and has to name the State of South Carolina as obligee. It comes on top of any other surety bond that a statute or regulation requires of the same applicant, not in place of one.
The residential provisions in section 40-59-220 [2] put the commission in control. For builders, the section offers the bond and a financial-responsibility showing as alternatives, with the commission approving the form and the surety. For specialty contractors, it is the commission that approves the bond amount.
How to comply
South Carolina's Contractor's Licensing Board and Residential Builders Commission both sit in the Department of Labor, Licensing and Regulation (LLR), and licensing information is at llr.sc.gov/clb.
- General or mechanical license: at application or renewal, the choice is between a qualifying financial statement and the bond for your license group. If a bond you rely on is canceled, you have ten days [1] to prove your net worth, or the license is suspended.
- Residential builder's license: file the executed bond of $15,000 [2] or more on the commission's form, with a surety it approves, or submit the proof of financial responsibility the commission accepts in its place.
- Specialty jobs over $5,000 [2]: the bond amount is whatever the commission approves, so the figure comes from the commission rather than the code.
Confirm the current group figures and forms with LLR, and read section 40-11-262 [1] and section 40-59-220 [2] before relying on this page.
Related
- Contractor license bond cost calculator: returns an annual premium range from any bond amount, a license group's net-worth figure included, and a credit tier.
- All states' bond requirements: South Carolina's rules set beside the other jurisdictions'.