Limited Liability Company Bond / LLC Bond

What Is a LLC Bond?

A limited liability company (LLC) bond is a crucial insurance product that offers significant benefits to both contractors and their employees. This type of bond acts as a protective shield, ensuring financial security for workers in situations where contractors violate licensing laws or fail to pay them for their labor. Additionally, it serves as a safeguard against wage disputes and other financial obligations. By securing an LLC bond, contractors demonstrate their commitment to employee well-being and help create a trustworthy work environment.

Who needs it?

In California, every construction business registered as an LLC must have a $100,000 LLC surety bond. The bond is required for all contractors in California who want to get licensed as an LLC. The bond cost is typically a fraction of the required amount, and can cost between $1,500 and $10,000 depending on personal credit.
The bond is stipulated in the Business and Professions Code section 7071.6. The California Contractors State License Board was authorized to issue contractor licenses to LLCs by Senate Bill 392 (Statutes of 2010, Chapter 698).

  • Independent Contractors

  • Carpenters

  • Plumbers

  • Electricians

  • Landscapers

  • Painters

  • Handyman

  • Heating & Air

  • Masonry

  • And More!

It’s always good to have insurance in case of accidents, even if it isn’t required contractually.

How much does it cost?

The cost of an LLC bond for contractors in California can vary based on multiple factors, such as the type of contractor, bond amount required, and the contractor’s creditworthiness. Typically, LLC bonds are priced as a percentage of the total bond amount, usually ranging from 1% to 15%. For example, if your bond amount is $100,000, you can expect to pay between $1,000 and $15,000 annually for the bond. It’s important to note that contractors with strong credit profiles and a proven track record may qualify for lower rates, while those with less favorable credit histories may incur higher costs.

Every business is unique, and an LLC Bond differ. The costs can also change depending on the number of employees a business has. That’s due to payroll is a major part of the premium estimate for work comp insurance.

The greatest way to find out how much your LLC Bond will cost is to get a Quick & Easy Quote

Basic Coverages

  • General Liability (GL): often referred to as business liability insurance, is coverage that can protect you from a variety of claims including bodily injury, property damage, personal injury and others that can arise from your business operations. Typically needed before a contractor can begin work on a job
  • Commercial Auto: Commercial auto insurance is liability and physical damage protection for vehicles, such as cars, trucks and vans, that are used for business. Commercial vehicles require a separate policy because they’re typically exposed to more risk than personal vehicles. You have the choice to cover attached equipment such as ladder racks and permanently attached tool boxes. Individual tools and materials usually aren’t covered under this policy.

Other coverages contractors might need

  • Business Owners Policy (BOP): Packages contractors liability and coverage for personal property and commercial buildings into one policy.
  • Workers’ Compensation: Protects if your employees become ill or injured while at work.