Who Needs a Virginia Contractor�s License?
In Virginia, contractors are licensed by the state�s Department of Professional and Occupational Regulation (DPOR). You�ll need to obtain a contractor�s license in one of the following categories if you do construction work including demolition, repair, or improvement projects valued at more than $1,000.
- Class A: Required for contractors handling individual projects of $120,000 or more—or multiple projects totaling $750,000 or more during a 12-month period.
- Class B: Required for contractors handling single projects valued at $10,000 to $120,000 or multiple projects totaling $150,000 to $750,000 over a 12-month period.
- Class C: Required for contractors handling single projects valued between $10,000 or multiple projects totaling less than $150,000 over a 12-month period.
Specialty contractors (e.g., plumbing, HVAC, electrical) will need to obtain a license in their particular field as well.
Be aware that Virginia issues contractor licenses only to business entities, not to individuals. To obtain a contractor�s license, the business must include a designated qualified individual who meets the states experience requirements. Requirements include 5+ years of experience for a Class A license, 3+ years for a Class B license, and 2+ years for a Class C license.
What Does the Licensing Process Involve?
Here are the steps to become a licensed contractor in Virginia:
- Establish a business entity (e.g., sole proprietor, LLC, partnership, corporation, etc.) and register it with the Virginia State Corporation Commission.
- Identify the responsible management (owners, officers, etc.), qualified individuals, and a designated employee who has passed the required 8-hour pre-license course and applicable exam portions (Class A and Class B licenses only).
- Complete and submit the license application and attach any required documentation, including proof of net worth or a Virginia Contractor License Bond (Class A and Class B licenses only). To avoid delays or the return of your unprocessed application, be sure to include the appropriate fee (listed on the first page of the application).
Why is a Surety Bond Required?
Virginia requires Class A license applicants to prove that the business has a net worth of $45,000 ($15,000 for Class B license applicants). Net worth can be demonstrated by providing a financial statement or CPA review/audit, but many applicants choose to purchase a surety bond instead. The purpose of the bond is to ensure that the contractor has the financial means to meet its obligations without risk of insolvency.
A Virginia contractor�s license bond provides the funds to compensate any party that suffers a financial loss due to the contractor�s unlawful or unethical conduct.
How Does The Bond Work?
A party who is injured financially by the contractor�s actions can file a claim against the contractor�s license bond. The surety company that issued the bond will investigate to determine whether the claim is valid. If the contractor doesn�t make timely payment on a claim, the surety company may front the payment�but only as an advance that the contractor will subsequently have to repay. The contractor, not the surety company, is legally responsible for paying claims.
What Does The Bond Cost?
The contractor pays an annual premium that is only a small percentage of the $45,000 or $15,000 required bond amount. The surety company determines that percentage, known as the premium rate, based on the business owner�s credit score and financial statements for the business and its owners. Those with good credit typically pay a premium rate of between 1% and 3%. Those with credit challenges may pay a higher premium rate.
Get Surety Bonds and Get Bonded Today for Your Contractor License
You can count on our seasoned surety bond agents to get you the bond you need in order to obtain or renew a contractor�s license in the state of Virginia. Apply online today!