In the state of New York, the only contractors who must be licensed at the state level are crane operators and asbestos removal professionals. However, many municipalities have licensing requirements for general contractors and home improvement professionals. Learn more about how to get a contractor�s license in New York below.
Who Needs a New York Contractor�s License?
Many of the jurisdictions requiring contractors to be licensed are in the �downstate��including counties around New York City, Long Island, and other predominantly urban or suburban areas in the southern part of the state. Few of the upstate counties or cities require contractors other than electrical contractors to obtain a license. Wherever you plan to work in New York, it�s best to check with your local county to find out if there are any unique licensing requirements for the type of contracting you will be doing.
The Licensing Process
Among the counties that do license contractors, there is wide variation in the specific licensing requirements. In general, such requirements may include:
- A completed application bearing the applicant�s Tax Identification Number (TIN)
- Proof of home address
- Proof of Worker�s Compensation insurance
- Fingerprinting and a background check
- A passing score on an exam
- A contractor�s surety bond
The requirements you may have to meet in your particular county or city may be different.
Why Is a Surety Bond Required?
The jurisdictions that require a surety bond do so to protect the public against financial loss resulting from a contractor�s failure to meet all contractual obligations in a lawful and ethical manner.
How Does a Contractor�s Surety Bond Work?
Any party who suffers a financial loss because of a contractor�s incompetence or unlawful or unethical behavior can file a claim against the bond and receive compensation. The company that issued the bond (known as the surety) will investigate to make sure that the claim is valid before it will be paid. The terms of the surety bond agreement make the contractor (known as the principal) solely responsible for paying valid claims.
Often, the surety will go ahead and pay a claim on behalf of the principal, who must subsequently reimburse the surety. This ensures that the claimant is paid promptly and gives the principal time to gather the necessary funds.
What Are the Costs of Surety Bonds for Contractors in New York?
The annual cost of any surety bond is a small percentage of the required bond amount. What a particular applicant will pay for a contractor�s surety bond depends on two factors: 1. the required bond amount, which is established by the licensing agency (known as the obligee), and 2. the premium rate the surety assigns to the applicant.
The main thing the surety considers in determining the premium rate for a given applicant is the applicant�s personal credit score. The higher the credit score, the lower the premium rate. Most contractors with good credit will pay a premium rate of between 1% and 3%.
Get Bonded Today
You can rely on Single Source Insurance to get you the surety bond you need in order to become licensed as a contractor in the state of New York.