Effective July 1, 2017 the State of Virginia has enacted a new $50,000 license bond requirement for Class “A” and Class “B” contractors in the Commonwealth. Now, when registering to be licensed, Class “A” and “B” contractors in Virginia will have the option to post a $50,000 Virginia Contractor License Bond instead of satisfying the minimum net worth requirements in the current Virginia law.
Per the Virginia Administrative Code, the new amounts of the minimum net worth which Class “A” and Class “B” contractors must maintain in order to be licensed are:
- Class “A” contractors must maintain a minimum net worth of $45,000.
- Class “B” contractors must maintain a minimum net worth of $15,000.
The new option to post the bond in lieu of maintaining the minimum net worth provides relief to license applicants. It reduces the financial burden placed on the contractor by previous legislation. By posting the bond instead of maintaining the net worth, contractors can use the free capital for their business.
The bond will need to be renewed every time the contractor renews their license; the current license term is two years.
The new bill that was passed can be seen here: Virginia Senate Bill 1113.
If you have any questions regarding the new requirement, please give our Bond Department a call and they will be able to assist you!