Iowa Plumbing and Mechanical Systems Bond
What is a plumbing contractor bond?
Like all surety bonds, the purpose of the plumbing contractor bond is to protect the public and the state by ensuring that your work is done to high professional standards.
If you violate state regulations or the terms of the bond agreement, or even if your work fails due to faulty materials, the affected party can make a claim against your bond. If the claim is upheld, the claimant is awarded damages which are paid by your surety company. The surety will then seek repayment from you, the bond holder.
Why do plumbers need contractor bonds?
In several states and many counties and municipalities across the country, you must post a plumbing bond in order to be licensed as a plumber. Illinois, Iowa, Minnesota, New Jersey, and Washington D.C. are among the states that require plumbing contractors to be bonded.
How much does a plumbing contractor bond cost?
Your annual premium will be a small percentage of the bond's full coverage amount. Depending on your personal credit score and other financial indicators, the amount you'll pay can range from less than 1% to as high as 10%.
For example, in Illinois, the bond's penal sum is set at $20,000. This would translate to an annual premium of $200 or less if you have excellent credit. Applicants with poor credit could pay as much as $2,000 annually for the required plumbing bond.
Cost of Plumbing Contractor Surety Bonds
| State | Bond Amount | Cost (Annual Premium) |
|---|---|---|
| Iowa | $5,000 | $100 |
| Illinois | $20,000 | $200* |
| Minnesota | $25,000 | $219 (two years) |
| New Jersey | $3,000 | $50 |
| Washington D.C. | $5,000 | $175 |
How can I qualify for a plumbing contractor surety bond?
To get a surety bond for your plumbing business, simply fill out the free quote request form above and get started.
You'll be asked to provide some basic information, including your credit score. Our bond specialists will then evaluate the details you've submitted and provide a quote for the best premium rate possible.
Upon your acceptance and payment of the bond premium, we'll immediately issue your plumbing contractor bond.
What else should I know about this surety bond?
A surety bond is a binding legal contract among three entities, the principal (your company), the obligee (the authority requiring your bond), and the surety (the company backing the bond).
You can avoid claims by abiding by the terms of the contract. However, in the event that a claim is filed, the surety steps in to investigate. If a claim is upheld, the surety company extends compensation to the affected party, and you must then repay that amount back to the surety.