Roofing Contractor Surety Bonds

What is a roofing contractor surety bond? 

Roofing contractors must post a surety bond in order to be licensed in most states. The bond helps promote ethical practices and contract completion by the roofer. In other words, the purpose of the bond is to protect your customers.

Should you, the contractor, violate a state law or regulation, or if you're unable to complete the roofing contract, a claim can be made against your bond.  

Surety bonds are not an insurance policy. Most states require contractors to show proof of insurance and obtain a bond to acquire a license. 

Why do I need a bond for my roofing license?

You cannot legally take roofing contracts without first acquiring a surety bond within each state you plan to work.

Roofing contractor bonds are necessary because roofing regulations are often complex and vary depending upon the city or county you're working in. Surety bonds can help limit regulatory oversight and negligence from unqualified contractors while also protecting the general public.

Additionally, if a roofing specialist is unable to complete a contract or breaches their contract in any way, a claim can be made against the surety bond and the client will be reimbursed for their losses.

In this event, you—the roofer—must repay the awarded claim amount to your surety company.

How much does this contractor bond cost? 

The price of a roofing contractor bond will vary based on several factors, namely the requirements of the state in which you’re applying for a license and your finances — including your credit rating.

Bond amounts vary widely across states. Oklahoma only requires roofing contractors to post a $5,000 bond, whereas Texas requires a $100,000 bond. States like Minnesota and Illinois fall closer to the middle of this range, requiring roofer bonds in the amount of $10,000 to $25,000.

It’s important to check with your state’s licensing authority to determine the correct bond amount for your roofing business.

Based upon your credit, this bond’s premium can range from 1% to 15% of the total bond amount. NNA Surety Bonds offers roofing contractor bonds in several states with annual premiums as low as $100.

How does a roofing contractor bond work?

Surety bonds encourage roofers to follow the laws and industry regulations within each state that they operate. Bonds also help to protect the public from contractors who violate these regulations, engage in fraudulent practices, or are unable to complete the contracted job.

A roofing contractor bond acts as a legal contract between three parties:

• The principal: you, the roofer.
• The obligee: the local, county, state or federal authority requiring the bond.
• The surety: the company that issues your bond.

What else should I know about this bond? 

Some states may offer several types of licenses for roofing contractors. And each license may require a different bond amount. 

For example, in Illinois, contractors can apply for a limited or an unlimited roofing license. For a limited license, you must post a $10,000 bond. Meanwhile, an unlimited license requires contractors to post a $25,000 policy. 

Other states may simply require a flat bond amount or offer only a single form of licensure. Always check with your state to determine your bond requirements, or contact our bonding specialists.