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The city of Amarillo requires the purchase of contractor license bonds for specific types of work. A contractor license bond is an agreement between three parties — the contractor or the principal who is buying the bond, the obligee, which is the Amarillo Code Enforcement Department and the beneficiary of the bond, and the surety company who guarantees the bond and makes payments in the event of a valid claim. Principals must reimburse the surety company for any damages paid out.

All parties undertake some risk during the course of any sort of work or project. The purpose of a construction license bond is to ensure that contractors abide by local, state, and federal regulations. Additional benefits are fewer damages from contractors violating codes, contractors making regular tax payments, and less cost in terms of enforcement. This is because the financial incentives of all three parties are aligned.

Thus, surety bonds don’t protect the contractor from financial damages like most insurance products. Instead, they protect the city and general public from damages that non-compliant contractors could potentially incur. Therefore, commercial license bonds guarantee that the contractor will abide by all local, state, and federal regulations, as well as any additional ones outlined in the bond.

A major risk for any person or company who hires a contractor is that the contractor will fail to abide by regulations. Negligent contractors can potentially create public and/or private damage and impose a financial burden. The contractor’s license bond protects the client by insuring them against this risk and also signals that the contractor is trustworthy.

It also leads to more work and opportunities for contractors in the long term because public and private clients can quantify, minimize, and offload the risk of hiring contractors who violate regulations.

Here are the three steps to getting a contractor’s bond in the city of Amarillo:

Step 1: Determine If You Need a Contractor’s Bond

The city of Amarillo Code Enforcement Department requires a contractor’s license bond for contractors in Landscaping Irrigation, House Moving, Non-Electrical Signs, Swimming Pools & Hot Tubs, and Water Treatment Installation before any permits can be issued.

More information on what specifically the city of Amarillo requires for contractors in terms of registration fees, bonding, licenses, and insurance can be found here.

Step 2: Figure Out Which Type of Contractor’s Bond You Need

Amarillo contractor’s bonds range from $1,000 to $25,000. The $25,000 bond is required for work that is typically more expensive and complicated, with more requirements to follow.

The following bond categories require a $1,000 bond:

  • Street Contractor
  • Appliance Dealer

The following bond category requires a $3,000 bond:

  • Sign Builder

The following bond categories require a $5,000 bond:

  • Landscape Irrigator or Irrigation Tech
  • Electrical
  • Plumbing

The following bond category requires a $10,000 bond:

  • Swimming Pool and Spa Contractor

And the following categories require a $25,000 bond:

  • Residential – Remodeling Contractor
  • Insulation Contractor
  • Commercial Roofing Contractor
  • Residential Roofing Contractor
  • House Moving Contractor

Step 3: Select and Purchase Online

Contractor license and permit bond applications are instantly approved. There is no credit review required prior to approval.

If you’re looking for an easy way to get started, we can help! Call us today or apply online now!

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