Alaska Contractor License Bonds

Get a Free Quote for Your Alaska Contractor Bond Today

Who Is Required To Purchase an Alaska Contractor Bond?

Alaska has 7 contractor license classifications:

• General contractor
• Residential contractor
• Residential contractor endorsement
• Specialty contractor
• Electrical contractor
• Mechanical contractor
• Handyman contractor

Every classification except the Residential Endorsement license requires a surety bond before the application can be submitted.

Specialty contractors can choose up to 3 specialties or trades. If you want to specialize in more, you must get licensed as a General or Residential contractor. This will require its own application process and it's own contractor bond.

The Alaska Contractor Bond Amount

Alaska has a set bond amount for each license classification.

The bond amount is set by the Alaska Division of Corporations, Business, and Professional Licensing. This amount is not the price of the bond.

The amount is the maximum coverage available to customers and subcontractors of a contractor in the event they fall victim to purposeful misconduct or fraud by the contractor.

How Much Does an Alaska Contractor License Bond Cost?

The cost of an Alaska contractor license bond is based on a rate quoted by a surety. This rate is typically less than 1% of the bond amount.

A surety is an insurance company that underwrites the surety bond. And like any insurance company, the rates they charge are based on their own internal assessment, typically taking into consideration these three factors:

• Personal credit
• Contracting experience and industry experience
• Any prior bond claims if you've been licensed in the past

They will also assess the contracting industry in Alaska as a whole and how many total claims have happened in the past.

Even though each surety uses these similar factors, the rates they quote will vary.

And because rates vary, the final prices can vary too. Specialized surety agencies like Surety Bonds Direct help customers save hundreds of dollars purchasing a contractor surety bonds.

We use our network of A rated sureties to price shop for you and find you the lowest possible price.

Here are some examples of good rates to average rates so you can get an idea of pricing. We'll use the $20,000 Residential Contractor bond for the bond amount.

Why is an Alaska Contractor Bond Required?

The Alaska Division of Corporations, Business, and Professional Licensing requires all individuals and businesses to obtain a contractor license in order to perform contracting services in the state.

This license process ensures each contractors has:

• A minimum level of experience
• Obtained the necessary level of education
• The proper business records are submitted
• Ensure the proper insurance policies are purchased and in place

The contractor license bond is one of those required insurance policies you must purchase before you can submit your application for review and approval.

What Does an Alaska Contractor License Bond Protect Against?

The contractor bond is a type of insurance for the protection of the contractor's customers and hired subcontractors.

Unfortunately, there will always be a small number of licensed contractors who purposefully make decisions to increase profits, financially harming their customers.

These fraudulent actions of misconduct include:

• Breaking the terms of a construction project
• Taking deposits or down payments and never starting or completing a project
• Replacing agreed upon materials with cheaper alternatives to increase profits
• Fail to pay subcontractors for completed work
• Fail to follow building codes and purposefully performing poor quality work

If a contractor is found guilty of any of these actions, a claim can be made against the contractor license bond for financial repayment.

Remember the amount of coverage only extends to the bond amount.

What Happens After You Purchase Your Bond?

After you purchase your bond, Surety Bonds Direct's issuing department will prepare your bond with the correct signatures, seals, and the required power of attorney so the Division of Corporations, Business, and Professional Licensing is guaranteed to accept your bond.

Alaska requires the original bond with your signature on it. This means the bond will have to be mailed to you.

This is a good reason to purchase your surety bond as soon as you can. You don't want the reason for a delayed application to be because you're waiting for your bond in the mail.

Get this done!

Renewing Your Contractor Bond

Alaska contractor license bonds expire one year from the active (effective) date of your bond.

Your bond specialist will reach out to you 30 to 45 days in advance of your renewal date to make paying the renewal premium easy.

Once you pay the renewal premium, your bond remains active.

This Contractor License Bond is Continuous

A continuous bond means the original bond remains active as long as you pay the renewal premium.

Most of the time, you never have to worry about having a new bond issued or submitting the bond to the Alaska Division of Corporations, Business, and Professional Licensing.

If we find you lower pricing during bond renewal, we'll secure you the lower priced bond. In this case you will have to submit the bond to the Division of Corporations, Business, and Professional Licensing so they know you're still actively bonded.

Contractor Bonds And Getting Your Alaska Business License/Registration

If you're applying for your first Alaska contractor license, read our post that outlines the 4 steps getting your Alaska contractor license.

At a high level the steps are:

1. Have your business structure and ownership in order
2. Purchase the necessary business and workers compensation if applicable
3. Purchase your contractor license surety bond
4. Pay the appropriate application fees and submit your application

Additional Alaska Contractor Bond Resources & Links

Click here to visit the Alaska Division of Corporations, Business, and Professional Licensing.