How to Obtain Your Registered or Certified Florida Contractor License

The decision to apply for your contractor’s license in the State of Florida is an exciting one.  You may be in the process of opening your own construction firm or have been hired by an existing firm in one capacity or another.  The purpose of this article is to provide insight into the licensing process and inform the applicant of the various licenses available.

Before moving any further, the applicant must determine the type of license to be obtained.  There are two main types of licenses in the State of Florida.  The first is a Registered Contractor’s License which allows a contractor to work only within the municipality which has issued the contractor a competency card and occupational license. The second license type is a Certified Contractor’s License which allows a contractor to work anywhere within the state.

Registered Contractor License Requirements

The requirements to obtain a Registered Contractor’s License are as follows:

• Applicant must be 18 years of age;
• Background check and fingerprints;
• Proof of financial stability by providing a credit report which includes a FICO derived credit score and indicates that local, state, and federal records have been searched;
  • NOTE: You will need to provide a financial stability surety bond in an amount ranging from $10,000-$20,000 if your credit score falls below 660.  Click here to learn more about the surety bond requirement’s cost, application process, and how it can be reduced.
• Certificate of competency from a local licensing office;
• Payment of application fee to Florida Department of Business and Professional Regulation;
  • $309 if initial registration is between May 1^st of an ODD year through August 31^st of an EVEN year.
  • $209 if initial registration is between September 1^st of an EVEN year through April 30^th of an ODD year.
• Proof of worker’s compensation (or waiver), liability, and other insurance required by the municipality;
  • $300,000 public liability and $50,000 property insurance for Division I Contractors;
  • $100,000 public liability and $25,000 property insurance for Division II Contractors; and
• A completed application.

Certified Contractor License Requirements

The requirements to obtain a Certified Contractor’s License are as follows:

• Applicant must be 18 years of age;
• Obtain a passing score on all applicable state exams required for licensure within four years;
  • The Fees associated with each exam are as follows:
    • $135 registration fee payable to Professional Testing;
    • $80 exam administration fee payable to the Department of Business and Professional Regulation;
    • $80 exam administration fee payable to Pearson VUE if the Business and Finance computer based test is needed.
• Four years of experience or a combination of college and experience;
• Background check and fingerprints;
• Proof of financial stability by providing a credit report which includes a FICO derived credit score and indicates that local, state, and federal records have been searched;
  • NOTE: You will need to provide a financial stability surety bond in an amount ranging from $10,000-$20,000 if your credit score falls below 660.  Click here to learn more about the surety bond requirement’s cost, application process, and how it can be reduced.
• Payment of application fee to Florida Department of Business and Professional Regulation;
  • If all exam parts were passed prior to January 1, 2009:
    • $409 if initial registration is between May 1^st of an EVEN year through August 31^st of an ODD year.
    • $309 if initial registration is between September 1^st of an ODD year through April 30^th of an EVEN year.
  • If all exam parts were passed after to January 1, 2009:
    • $249 if initial registration is between May 1^st of an EVEN year through August 31^st of an ODD year.
    • $149 if initial registration is between September 1^st of an ODD year through April 30^th of an EVEN year.
• Proof of worker’s compensation (or waiver), liability, and other insurance required by the municipality;
  • $300,000 public liability and $50,000 property insurance for Division I Contractors;
  • $100,000 public liability and $25,000 property insurance for Division II Contractors; and
• A completed application.

You may have noticed that the state has separate classifications for contractors.  These classifications are commonly referred to as Division I and Division II.  Division I Contractors are General and Building contractors only.  Division II Contractors are all other types of contractors such as plumbing, electrical, HVAC, etc.

Do you want help with your Construction license application?

The licensing process can be confusing and difficult.  This often caused by the sheer number of applications available to you.  Additionally, satisfying all of the application’s requirements can be time consuming.  Learn more about how The License Company can help with your construction license application.

Financially Responsible Officer Requirements

Additionally, you may also need a financially responsible officer surety bond if you anticipate qualifying an additional business entity and act for the organization in all matters connected with its contracting business.  This bond is only needed when the qualifier (licensed contractor) does not have final approval or authority on all matters of the business including checks, payments, drafts, contracts, etc. made by the entity you are qualifying.

Lastly, all fees, insurance amounts, and requirements are subject to change from time to time.  Applicants should consult with the DBPR to determine the exact requirements as of the time the application is made.

How do I apply for a Division I/II Financial Stability Surety Bond and/or Financially Responsible Officer Surety Bond?

1. Start by filling out our Online Surety Bond Application by clicking here; or
2. Download our PDF Surety Bond Application and email or fax the information to submissions@dblsurety.com or 888.204.8716.

How much do Bad Credit Surety Bonds cost?

The cost of Bad Credit Surety Bonds typically ranges from 4-10% of the bond amount.  This means if you need a $10,000 surety bond, you can expect to pay between $400 and $1,000 each year the bond is in place.  In another example, we’ll use the Florida Car Dealer Surety Bond amount of $25,000.  An applicant with bad credit should expect to pay $1,000 to $2,500 depending on their credit score.

Why are Bad Credit Surety Bonds more expensive?

Bad Credit Surety Bonds are generally more expensive than surety bonds issued for individuals and businesses with good credit.  The reason for the higher cost is because a surety company generally underwrites each surety bond based on an individual’s credit score.  Your credit score is an indication of your ability to repay a surety company if a claim on your bond occurs.

What things effect my credit score associated with Bad Credit Surety Bonds?

Instances like late pays, repossessions, foreclosures, liens, and the amount of revolving credit available can influence your credit score negatively.  Generally, the aforementioned instances could also lead to higher surety bond premiums.  However, credit scores are just one indicator of the applicant’s ability to reimburse a surety company when a claim occurs.  Let’s use a home foreclosure for our example.  A foreclosure will impact your credit score dramatically but let’s say the foreclosure was a “strategic foreclosure” and your personal financial statements show money in the bank and other liquid assets.  A surety company may be willing to consider those facts and reduce your annual premium based on your explanation and condition of your personal financial statement.

What are Bad Credit Surety Bonds?

Bad Credit Surety Bonds are no different than those bonds issued for individuals and companies with good credit.  The same bond forms are used, the same bond amounts are required, and the bond itself functions just like one written for an individual with good credit.  The only difference is the amount of premium the surety company charges for it.  Again, the company is charging more for what it feels like is an increased risk based on your credit history.

How can I reduce the cost of Bad Credit Surety Bonds?

We touched a little on this in a previous paragraph but there are things that you can do to reduce the amount of premium charged for your Bad Credit Surety Bonds.  A personal or business financial statement showing a sufficient amount of cash and other liquid assets (stocks, cash value of life insurance, etc.) can help.  A cosigner with a credit score of over 700 and who is willing to sign the indemnity agreement could also reduce your surety bond cost.  Ultimately, anything that helps to convince the surety company that you and/or your company are less of risk could help reduce your annual surety bond premium.

Surety Bond Definition

The definition of a surety bond is a promise by a surety company to pay another party if a second party does not live up to its obligations set forth by the entity requiring the surety bond. To put it more simply; a surety bond is a promise to pay if something goes wrong.

Who needs a surety bond?

Many different types of companies need surety bonds. Motor vehicle dealers in Florida, Texas, Georgia, and other states need surety bonds which protect their customers. Cleaning services, home health care companies, and similar businesses need surety bonds which protect their clients from theft. Construction companies need surety bonds for licensing, to ensure compliance of various municipal codes, and to guarantee performance and payment on larger construction projects.

What does a surety bond do?

A surety bond protects your clients which are often referred to as an obligee. An obligee can vary from state licensing departments to various municipalities to individuals. It’s important to understand that only the obligee(s) can benefit from a surety bond as it’s a common mistake that a surety bond offers protection to you or your company. This is not the case as a surety bond is meant to provide protection to your clients in a worst-case scenario where you or your company cannot reimburse them when a valid claim occurs. For example: Let’s say you purchase a $10,000 Business Service Bond for your home health care or other business which involves your employees entering someone’s home or place of business. One of your employees steals a $9,000 ring from one of your clients and is convicted of the theft in a court of law. Your client then makes a claim on your Business Service Bond for the $9,000 ring and the surety company considers the claim to be valid according to the terms and conditions of the surety bond. However, you cannot afford to reimburse the client for the $9,000 ring. The surety bond would then provide the funds to reimburse your client not to exceed the $10,000 Business Service Bond amount.

So what happens next?

When you completed your application you most likely signed what is called a general agreement of indemnity or general indemnity agreement (GIA). This agreement outlines the rights of the particular surety company who wrote your bond. Simply put, the GIA allows the surety company to seek reimbursement for any claims paid and their associated costs from any entity and individual who signed the indemnity agreement. In some cases this process could include written demands for reimbursement, the seizure and sale of business and personal assets, and many other methods which would allow the surety company to be made whole for the costs they incurred. *IMPORTANT – All indemnity agreements are different. None of the statements above should be considered binding on any surety companies represented by DBL Surety, LLC. Read your indemnity agreement carefully to better understand your obligations.

Types of Surety Bonds

There are many different types of surety bonds available. By many, we mean tens of thousands with new bonds being developed each year. They are typically a requirement in order to obtain your professional license depending on your state and industry. Additionally, surety bonds are also required on larger construction projects and often required by courts when appointing guardians of minors, filing an injunction, and other various court-related actions.

How do I know what type of surety bond I need?

So you’re applying for a state-regulated license, opening a new business, or working with a new general contractor and the response you receive is, “You need to be bonded.” You ask yourself, “Well, what does that mean and where do I find one???” That’s where we come in and provide you with the answers you need to get bonded. Listed below are several different classes of surety bonds:

• License and Permit Bonds – These surety bonds are most often required by state or local government departments in order to obtain your professional license. Common license and permit bond types are: Motor Vehicle Dealer Bonds, Seller of Travel Bonds, and Construction License Bonds.
• Commercial Bonds – This is a very generic surety bond description which includes license and permit bonds. They often include any bond which does not fall under the construction and court surety bond descriptions below. Common commercial bond types are: Lease Deposit Bonds, Business Service Bonds, and Commercial Contract Bonds.
• Court Bonds – These surety bonds are required by a court of law for various legal proceedings and appointments. Common court bond types are: Guardian Bonds, Appeal Bonds, Injunction Bonds, and Estate Bonds.
• Construction Bonds – These surety bonds are typically required by a local/state municipality or the federal government for public construction projects over $100,000. Additionally, many general contractors require these bonds from their subcontractors. These bonds guarantee the performance of a contract and payment of your company’s subcontractors and suppliers. The most common types of construction bonds are performance bonds, payment bonds, and supply bonds.

Bonds by State

Here’s a listing of the most popular states for surety bonds. The links below will take you directly to a listing bonds by that particular state.

Florida Surety Bonds by Type

Texas Surety Bonds by Type

Georgia Surety Bonds by Type

California Surety Bonds by Type

Still don’t know what type of surety bond you need?

Chat with a surety bond representative by clicking on the “Need Help” button to the right, call one of our friendly customer service representatives at 386-316-2547, or email us at info@dblsurety.com and we’ll be happy to assist you!

What is a General Indemnity Agreement or General Agreement of Indemnity?

A general indemnity agreement (GIA) is a document which outlines the surety/client relationship.  GIA’s typically indicate promises and agreements by which the indemnitors, by signing the GIA, and the surety company, by issuing the bond, agree to abide.  In most cases, the surety company will require you to sign their GIA prior to issuing your surety bond.

Do different insurance companies have different General Indemnity Agreements?

Yes, each insurance company will have a GIA which is specific to them.  In fact, some insurance companies have multiple GIA forms which can be used to obtain the indemnity of you or your company.  The most popular GIA is what’s called a short-form indemnity agreement.  These are used for relatively low risk bonds in terms of both the amount of the bond and the type of risk.  They are typically less than one page long and encompass the basic terms the surety company seeks to ensure.  The second form of GIA is what’s called a long-form indemnity agreement.  These agreements are used for larger bond amounts and often with clients who are in need of multiple surety bonds.  The long-form GIA is usually made up of several pages of information which govern the relationship between the surety company and client.

What types of things does General Indemnity Agreement typically include?

Almost all general indemnity agreements include a basic representation of facts.  The representations of fact usually state that you have requested the surety company to provide a bond and the indemnitors have a beneficial interest in receiving the bond.  The GIA typically then goes on to address the promises and agreements made in consideration of bond issuance.  These promises and agreements will vary between each surety company and their respective GIA’s.  Generally speaking, they include but are not limited to payment of premiums, payment of losses incurred by the surety as a result of issuing the bond or enforcing its provisions, reserve deposits, asset and record examination, other items which are important to the surety/client relationship.  This explanation should only be used as an example of the items a GIA may contain and each client should read and consult with their attorney regarding the language included in their specific GIA.

Who has to sign the General Indemnity Agreement?

In most cases, the surety company will require the general indemnity agreement to be signed by all owners, spouses, and the entity needing the surety bond.  In some cases, generally involving companies with large net worth, the surety company may waive the personal indemnity of all or some owners as they feel the company’s assets support the obligation.  It’s important to understand that this is the exception to the rule and reserved for only the best-in-class risks.

Why does my spouse have to sign the general indemnity agreement?

This is a very common question and the justification is usually that he/she has nothing to do with the business needing the surety bond.  The best answer to this question is that the surety company seeks a complete indemnity package when it comes to personal indemnity of owners and spouses.  This protects a surety company when one spouse transfers all assets from his/her name into their spouse’s name.  The process is very similar to obtaining a bank loan which the bank would seek to claim the same position.