City of Omaha, NE, Contractor Bond Requirements
Contractors in Nebraska are not subject to a bonding requirement, unlike those in many other states across the U.S. However, the City of Omaha does require some contractors to post a surety bond as part of their licensing process.
This surety bond, known as a contractor license bond, is mandated to guarantee contractors’ compliance with local codes– as well as all applicable laws and regulations. The protection comes in the form of a financial guarantee by the bonding company that underwrites the bond. If the contractor’s actions provide a foundation for a claim, the surety is obligated to reimburse the claimants. However, contractors always bear the ultimate responsibility, so they will eventually need to reimburse the surety.
Want to learn more about the bonding requirement for City of Omaha contractors? Continue reading the Q&A sections below.
Frequently Asked Questions
Which City of Omaha contractors need to get bonded?"
The bonding requirement extends to the following contractor license types: Class A, B, C, D and E.
Each of them has their own limitations so it’s important to understand the terms of your licensure to make sure you are compliant.
How much does it cost to get bonded as a contractor in the City of Omaha?"
The penal sum of contractor license bonds in Omaha is set at $10,000. This is not the cost for contractors, though. The penal sum of the bond is the maximum compensation a claimant can obtain if the contractor is in violation of the bond terms.
To get bonded, contractors pay annual premiums, which are a small percentage of the penal sum. The premiums are often between 1%-3%, if the applicant has good credit standing. Applicants with bad credit often see higher premiums. Refer to the table below for more information.
|Bond Type||Surety Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|City of Omaha Contractor Bond||$10,000||$100-$150||$100-$300||$300-$500||$500-$1,000|
These estimates are based on your credit score alone, which is not always the only factor that sureties consider. Your professional experience, the age of your business, and your financial strength are usually also considered. Find out more on our “What Does a Surety Bond Cost?” page.
How does bonding work if I have bad credit?"
The only difference between applicants with good credit and those with bad credit is in the premium the pay. 99% of bad credit applicants can still get bonded, and don’t even have to post collateral. The only exception are applicants with open bankruptcies or late child support payments- in most cases their applications will be rejected by bonding companies.
Our bad credit surety bonds guide contains more information that contractors with credit issues will find useful.
How do I apply to get bonded?"
Using our online application is the fastest way to get bonded. It takes a few minutes to submit all the details. We give you a free quote at the end and, if you choose to continue, we can help you fill out the bond form and provide all the paperwork you need for the bonding company.
Processing times are quite fast, so we can mail your bond within 1-2 business days in most circumstances. Obligees always require the original bond form when you apply. If you want to keep digital copies, you can request them via email.
How do I get licensed in the City of Omaha?"
In order for the City of Omaha to grant you a contractor license, you need to complete a number of additional steps. You will need to buy insurance coverage and pass an examination. There are some additional specifics which are based on the contractor classification you choose. Consult the website of the City of Omaha for all the details.
What happens if someone files a claim?
If you follow all regulations and building codes, there should be no reason to worry about bond claims. However, if you have been notified of a claim, you can either settle it out-of-court or try to fight it in court.
The best course of action depends on whether you committed a violation or not. If you did, it’s best to reach an out-of-court settlement. If you did not, however, and you can show sufficient proof of it, you can even get legal assistance from the surety.
Still have questions about getting bonded as a Nebraska contractor? Call us at (877)-514-5146 to let us know how we can help!