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Iowa surety bonds are required by many municipalities, as well as state agencies. Apply for an Iowa Surety Bond today! Single Source Insurance is a leading Iowa surety bond company. Apply easily online and take advantage of lowest rates. If you do not see the exact bond type you need, please contact us or complete a miscellaneous application.
Iowa issues contractor licenses in two categories: construction contractor licenses and contractor licenses. Construction contractors are Iowa�s equivalent of general contractors, although the term �general contractor� is not used officially. Construction contractors perform a variety of work, such as electrical, plumbing, roofing, painting, landscaping, window and door installation, etc. They are licensed by the Iowa Division of Labor.
The contractor license category, however, applies to those working specifically as plumbing and mechanical specialty contractors. Contractor licenses are issued by the Plumbing and Mechanical Systems Board.
An Iowa contractor license bond obligates contractors to comply with all applicable laws and regulations governing their particular work. It also protects the government entity requiring the bond and consumers against financial loss due to a contractor�s unlawful or unethical actions.
There is no statewide bonding requirement for construction contractors or contractors in Iowa. However, certain municipalities require a contractor license bond. All out-of-state construction contractors must purchase a $25,000 Iowa contractor license bond. This is the bond�s �penal sum,� the maximum amount available to pay a single claim.
The surety bond agreement for an Iowa contractor license bond is a legally binding contract between three parties:
Any financial harm to the obligee or a consumer stemming from the principal�s violation of the surety bond agreement can result in a claim against the bond up to the bond�s penal sum. If the surety finds a claim to be valid, the principal is legally obligated to pay it. As a practical matter, however, the surety typically pays the claimant directly on behalf of the principal. This �advance� payment by the surety creates a debt that the principal must repay to the surety.
The premium for an Iowa contractor license bond is a small percentage of the required bond amount established by the obligee. In setting the premium rate for a given bond applicant, the surety�s main concern is the risk of non-repayment for claims the surety might have to pay on behalf of the principal. Therefore, the primary factor the underwriters take into consideration is the principal�s creditworthiness, as indicated by the principal�s credit score. Other factors that enter into the premium determination include the principal�s business finances and industry experience.
A principal with great credit should qualify for a �standard market� premium rate of between one and three percent of the required bond amount. A principal with lesser credit will pay a higher premium rate.
Request a convenient online quote today, or discuss your Iowa contractor license bond needs with one of our experienced surety bond specialists.
