Georgia Residential and General Contractor Bond: A Comprehensive Guide

November 17th, 2020

This guide provides information for insurance agents to help contractors on Georgia Residential and General Contractor bonds

At a Glance:

• Average Cost: $250 per year
• Bond Amount: $25,000
• Who Needs It: All individuals and businesses that act as residential and general contractors in the State of Georgia
• Purpose: To ensure the public will receive compensation for any damages should the contractor fail to comply with contractor licensing law
• Who Regulates Contractors in Georgia: The Georgia Board for Residential and General Contractors (BRGC)

Background

Georgia Code 43-41-6 requires all residential and general contractors operating in the state to obtain a license with the BRGC. The Georgia legislature enacted licensing laws and regulations to ensure that contractors engage in ethical business practices.

In order to provide financial security for the enforcement of the license law, contractors must purchase and maintain a $25,000 residential and general contractor surety bond to be eligible for licensure.

What is the Purpose of the Georgia Residential and General Contractor Bond?

Georgia requires contractors to purchase the Residential and General Contractor Bond as part of the application process for either the Residential or General Contractor License. The bond ensures that the public will receive compensation for financial harm if the contractor fails to comply with the licensing regulations. In short, the bond is a type of insurance that protects the public if the contractor breaks licensing laws.

How Can an Insurance Agent Obtain a Georgia Residential and General Contractor Surety Bond?

BondExchange makes obtaining a Georgia Residential and General Contractor bond easy. Simply login to your account and use our keyword search to find the “contractor” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensure that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

Is a Credit Check Required for the Georgia Residential and General Contractor Bond?

Credit checks are not required for the Georgia Residential and General Contractor bond.

How Much Does the Georgia Residential and General Contractor Bond Cost?

The $25,000 Georgia Residential and General Contractor surety bond costs just $250 per year.

How Does Georgia Define “Residential Contractor”?

To paraphrase Georgia Code 43-41-2, a residential contractor is any individual or business entity who offers to perform, performs, or submits a bid to perform construction services on a residential property as an independent business, when the project value/costs exceed $2,500.

How Does Georgia Define “General Contractor”?

To paraphrase Georgia Code 43-41-2, a general contractor is any individual or business entity who offers to perform, performs, or submits a bid to perform construction services as an independent business. General contractors can perform construction services on both residential and commercial properties.

How Do Contractors Apply for a License in Georgia?

Contractors in Georgia must navigate several steps to secure either their general or residential contractors license. Below are the general guidelines, but contractors should refer to the licensing statutes for details on the process.

License Period – All residential and general contractor licenses are valid for one year from the date of issuance and must be renewed before the expiration date.

Step 1 – Determine the License Type

Georgia requires contractors to obtain specific licenses corresponding to the nature in which the contractor’s business operates. Below are the different types of the Georgia Residential and General Contractors License.

• • Residential (Basic) – Performs contract work on residential structures not exceeding three stories
  • Residential (Light Commercial) – Can perform all contract work as a basic residential contractor, and is authorized to perform contract work on multifamily residential building structures that are 4 stories or less and do not exceed $25,000 square feet of interior space ($50,000 if working on a pre-engineered steel building)
  • General (Limited Tier) – Can only perform work as a general contractor on projects costing $500,000 or less
  • General – Can act as a general contractor on projects totaling more than $500,000

Step 2 – Meet the Initial Qualifications

Contractors seeking to obtain a license in Georgia must meet the following prerequisites before applying for a license:

• • Must be at least 21 years of age
  • Be of good moral character
  • Experience and/or Education Requirements based on license type:
    • Residential (Basic):
      • Worked for a licensed residential contractor for a minimum of two years; AND
      • Directly involved in the successful completion of two projects
    • Residential (Light Commercial):
      • Bachelor’s degree in a related field and at least one year of relevant work experience; OR
      • Combination of academic and work experience totaling four years; OR
      • Four years of relevant work experience, two of which is under a residential contractor
    • General:
      • Minimum Net Worth of $25,000 (Limited License) or Minimum Net Worth of $150,000 (General); AND
      • Bachelor’s degree in a related field and has at least one year of relevant work experience; OR
      • Combination of academic and work experience totaling four years; OR
      • Four years of relevant work experience, two of which is under a general contractor

***Businesses must employ at least one “qualifying agent” who meets the experience requirements and has passed the exam corresponding to the license classification.***

Step 3 – Purchase Insurance

All residential and general contractors must purchase and maintain worker’s compensation insurance (if the contractor has employees) AND general liability insurance with the following limits:

• • Residential (Basic) – $300,000
  • Residential (Light Commercial) – $500,000
  • General – $500,000
  • General (Limited Tier) – $500,000

Contractors must submit proof of insurance with their application.

Step 4 – Purchase a Surety Bond

All residential and general contractors must purchase and maintain a $25,000 residential and general contractor surety bond.

Step 5 – Complete the Application

Contractors can submit their signed and notarized application online through Georgia’s licensing portal or mail their application to the following address:

State Licensing Board for Residential and General Contractors
General (or Residential) Contractor Division
237 Coliseum Drive
Macon, GA 31217

Contractors must complete the application corresponding to their intended license type, including the following steps:

• • 5.a Work Experience – Applicants must submit proof of their education/work experience with their application
  • 5.b Completed Project – Contractors must submit a detailed description of one or more successful projects they helped complete
  • 5.c Secure and Verifiable Document – Contractors are required to submit a copy of either their driver’s license, passport, or any other government-issued identification

Step 6 – Pay Fees

All applicants must pay a $200 application fee when submitting their application.

Step 7 – Pass the Exam

After the contractor has submitted their application and paid the application fee, they can schedule the licensure exam. The exam will consist of two parts, (1) a business law section, and (2) a section specific to the type of license.

The exam will be administered in person and contractors will need to bring two forms of identification. At least one of the IDs must contain the contractor’s photograph and signature (a driver’s license or passport will suffice).

How Do Georgia Contractors Renew Their License?

Georgia residential and general contractors can renew their licenses online through Georgia’s licensing portal. Contractors can find instructions for how to renew their licenses here.

All residential and general contractor licenses are valid for one year from the date of issuance and must be renewed before the expiration date.

What Are the Insurance Requirements for Georgia Residential and General Contractors?

The state of Georgia requires all contractors to obtain liability insurance (limits specified in Step 3). Contractors must also purchase and maintain a $25,000 residential and commercial contractor surety bond.

How Do Georgia Residential and General Contractors File Their Bond?

Contractors should mail the completed bond form, including the power of attorney, to the following address:

State Licensing Board for Residential and General Contractors
General (or Residential) Contractor Division
237 Coliseum Drive
Macon, GA 31217

The residential and general contractor surety bond requires signatures from both the surety company that issues the bond and the contractor. The surety company should include the following information on the bond form:

• County where the contractor is located
• The legal name of entity/individual(s) buying the bond
• Surety company’s name and address
• Date the bond goes into effect
• Date the bond expires
• License type
• Date the bond is signed

How Can Georgia Contractors Avoid Bond Claims?

To avoid claims on the Residential and General Contractor Bond, contractors must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:

• Do not be dishonest on the initial or renewal license application
• Do not assist unlicensed individuals in work that requires a license
• Do not abandon any jobs without just cause and giving proper notice
• Do not engage in, or allow any representatives of your business to engage in, any acts of fraud
• Obtain building permits as required

What Other Insurance Products Can Agents Offer Contractors in Georgia?

Georgia requires all residential and general contractors to obtain liability insurance. Contractors with employees will also have to purchase workers’ compensation insurance. Bonds are our only business at BondExchange, so we do not issue any form of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Georgia Contractors?

Georgia conveniently provides a public database to search for active residential and general contractors in the state. The database can be accessed here.

Contact BondExchange for additional marketing resources.

What other Contractor License Bonds are Required in Georgia?

Georgia Septic Tank Contractors will need to purchase and maintain a surety bond to be eligible for licensure.