Kentucky Contractor License Bonds

Get Your Kentucky Contractor License Bond

Who Is Required To Purchase a Kentucky Contractor Bond

The Kentucky Roofing Contractor Bond

This bonding requirement for roofing contractors is one of the more unique requirements, compared to other states.

In nearly every other state, contractors are required to purchase a surety bond mandated by a government agency or department for the protection of the public.

In Kentucky, the Kentucky Roofing Contractors Association (a private association), sets regulations for being a roofing contractor in the state. They also encourage all roofing contractors to purchase a $10,000 roofing contractor bond.

The Kentucky Highway Encroachment Bond

Any construction work performed on the Kentucky highway system requires a surety bond called a highway encroachment bond. This is a type of right-of-way bond or permit bond.

Because you'll be performing work on state "public" land, the Kentucky Transportation Cabinet wants to ensure that all non-conforming aspects of the public encroachment can be corrected without expense to the Cabinet.

County or Municipal Bonding Requirements

Depending on where your project is located you may have to purchase a separate county or city contractor license or permit bond.

You'll be notified of these additional bonding requirements when you apply for the necessary permits to begin work on the project.

The most common cities we have helped contractors purchase contractor bonds for are:

• Fayette county
• Owensboro county
• Lexington county
• Jefferson county
• City of Louisville

Most of these local bonds are license bonds. This means as long as you're doing work in the county you'll need an active contractor license bond.

Jefferson county only requires wrecking contractors to be bonded:

As you can see, on the local level, the bonding requirements can vary. But each bond serves a similar purpose.

Why is a Kentucky Contractor License Bond Required?

Kentucky is unique because there is no state level requirement for licensing contractors. Surety bonding mandates are left to local counties and cities to implement based on data they collect year to year.

And what really separates Kentucky is roofing contractors have a private association that sets the standards for contractors in the state.

These licenses and standards are required to demonstrate:

• A minimum level of experience
• The necessary level of education
• The proper business records are submitted
• An appropriate license type for the projects they want to bid on

The local governments and associations want to ensure contractors are serving the public, completing jobs appropriately, and adding value to the community.

Requiring a surety bond is one of the primary ways contractors are held accountable (financially) to the promises they make when taking on a new customer.

What Does a Kentucky Contractor License Bond Protect Against?

It doesn't matter what type of license you're obtaining, all contractor bonds serve the same purpose of ensuring the contractor completes contracts and does not engage in business practices that financially harm their customers on purpose.

And yet, there will always be licensed contractors who cut corners to increase profits or engage in other fraudulent or unlawful activity.

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
• Failing to pay subcontractors for completed work
• Neglecting 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 or permit for financial repayment, but only up to the bond amount.

How Much Does a Kentucky Contractor Bond Cost?

At a high level the cost of a surety bond is based on a rate quoted from a surety.

A surety is an insurance company that underwrites surety bonds. They assess applicants primarily using these three factors to determine a rate:

• Personal credit of the owner or owners
• Contracting experience and industry experience
• Any prior bond claims (if you or an owner has been licensed in the past)

However, each surety conducts their own independent assessment. This means the rate from one surety to the next will be different. Many times, vastly different.

What is a Specialized Surety Agency?

Surety Bonds Direct is a specialized surety agency. We work with multiple A rated sureties and price shop for you to find and deliver the lowest possible rate and price.

For county and municipal contractor bonds in Kentucky, we have secured low fixed prices up to $25,000. This allows you to

• Skip having your credit pulled
• Speed up the bond purchase process

Your price is determined by the bond amount you require multiplied by 1% to 1.8% depending on the bond type.

The minimum price is $100.

Click here and discover your bond price. It takes about 60 seconds to complete our online bond form.

Kentucky Roofing And Highway Encroachment Bond Pricing

These bond require a custom quote from a surety following the process outlined above.

Let's look at the $10,000 Kentucky roofing contractor bond for example pricing. The rates in the table are from really good to about average.

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, notarized seals, and the required power of attorney.

Kentucky allows us to email you a copy of the bond you need. This speeds up the process for you.

If you run into an licensing agency or department that requires a copy of the original contractor bond, we can mail you the original copy.

Just make sure you take into account the time it takes to have the bond mailed to you. If you're on a tight deadline, get your bond requirement completed so you it's not the reason for any delay.

Determining The Contractor Bond Term

Contractor bonds have a bond term at which point the bond expires.

Roofing contractor bonds expire on December 31st of each calendar year.

All other bonds typically have a bond term or 12 months for the effective date of the bond.

The effective date is a date you choose when purchasing your bond. And in many cases, you can even choose to purchase the bond for multi-year terms and save money.

Permit and performance bonds - like the highway encroachment bond - are purchased for the life of the project. Most permit bonds have a term or 12 months so if the project were to extend past this time period, you would have to renew the bond.

Renewing Your Bond

Renewing your contractor license bond is easy. Your Surety Bonds Direct 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 is activated for the next term. This is called a continuous bond.

If you no longer need your bond, don't renew it and it will expire automatically.

Contractor License Bonds And Getting Your Kentucky Business License/Registration

The process for applying for a contractor license or permit is typically very similar.

At a high level the steps are:

1. Create a business registry or register a business name
2. Outline business management
3. Decide on license classification and specialty or registered agent
4. Purchase the required surety bond
5. Purchase the required liability and workers compensation insurance
6. Pay all the appropriate fees
7. Submit your completed application

Here are some local links to help get you moving in the right direction.

• Kentucky Roofing Contractors Association
• Kentucky Transportation Cabinet
• Lexington contractor registration
• Louisville contractor licenses