Utah Contractor's License Bond

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Bond Penalty: 20% of the annual gross distributions, $50,000, $25,000 and $15,000 minimum based on classification

An Utah contractor's license bond is required from applicants in order to secure their compliance and financial obligations to the State and consumers. Pursuant to §58-55-360, "An applicant for licensure as a contractor, applicant for renewal or reinstatement of a contractor's license must demonstrate to the division and the commission the his or her "financial responsibility" before the issuance, renewal or reinstatement of a license by one of the following: completing a questionnaire developed by the division and attesting to its accuracy, or by submitting a contractor's license bond in an amount determined by the Commission. It is completely within the discretion of the Director to approve or deny an applicant's request for waiver of the surety bond. The decision is based on the applicant's creditworthiness and financial statement. If the waiver request is denied, the Commission generally fixes the contractor bond amount on twenty percent (20%) of the annual gross distributions from an unincorporated entity to its owners, subject to certain class-specific requirements and minimums. That sum must include coverage for unpaid obligations incurred by the licensee and his or her failure to pay income taxes and self-employment taxes on the gross distributions from the entity to him or her. The form to request a waiver or release of the license bond requirement may be submitted along with the application.

The Utah contractor's license bond is a guarantee of compliance with the Utah Construction Trades Licensing Act. The bond form stipulates several strict obligations. As a licensee the contractor must:

  • Indemnify all persons, firms and corporations for losses which may occur as the result of the licensee's violation of any of the unlawful or unprofessional conduct provisions of regulations (Title 58, Chapters 1 and 55).
  • Pay all financial obligations including the payment of income taxes and self employment taxes on payments from the licensee firm to the owner(s).
  • Not violate any law respecting commerce in contracting promulgated by a licensing or regulating authority, regardless of the jurisdiction.

There are license classes specific to the type of work in which contractors may engage. Each class requires a specific Utah contractor's license bond penalty. Pursuant to R156-55a-602, a contractor must provide a license bond issued by a surety acceptable to the Division. An "acceptable surety" is one that is listed in the Department of Treasury, Fiscal Service, Circular 570, entitled "Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies (known as the "T-List"). A candidate may apply under 58-55-306(5)(b)(iii)(B), in which case the Commission generally follows the "twenty percent" formula. If the license candidate applies under any subsection other than Subsection 58-55-306(5)(b)(iii)(B), the minimum amount of the surety bond is $50,000 for the E100 or B100 classifications; $25,000 for the R100 classification, or $15,000 for other classifications.

Pre-license education, liability insurance requirement and miscellaneous applicant requirements may be viewed on the Division's Appy for a License page. Documents should be submitted to:

PO Box 146741
Salt Lake City, UT 84114-6741

Utah surety bond leader, Surety One, Inc. is a specialist in providing for the bonding needs of general, specialty and artisan contractors. We offer this class of surety bond and performance bonds to all applicants in EVERY state where contractors must be bonded. Although personal credit is a factor in surety bond underwriting, we have programs to fit every credit condition. Call (800) 373-2804, email Underwriting@SuretyOne.com or click here for a live chat regarding a Utah contractor license bond application or to discuss your particular needs.

Surety bond application review and quoting are free of charge. There is no obligation to purchase.

A “contractor’s bond” is one of the most common surety bond needs in the North American market but what does that term mean? MANY different parties may require a contractor to provide a "bond". Private and public project owners, state licensing boards and local municipalities all routinely require contractors to file a bond of one type or another to guarantee very specific things. Generally the need will fall in to one of these categories:

  • License & Permit Bonds (L&P) - required by states and municipalities to issue a contractor license. These may be simply “obey the code” obligations, or can include onerous wage guarantees.
  • Third Party Fidelity Bonds - also known as dishonesty bonds, insure dishonesty losses resulting from the contractor and his or her employees’ actions while providing services on a client’s premises (this is what a party refers to when he says, "We are bonded.").
  • Contract performance bonds: bid bonds, payment and performance bonds for particular projects.