Surety Bond Encyclopedia

Contractor License ($2,500) Bond - City of Fordyce, AR in Arkansas

Brief Summary

The Fordyce contractor license bond is a $2,500 bond in favor of the City of Fordyce. It is small and quick to put in place, but it is a city requirement only. It does not stand in for the Arkansas contractor license that state law requires before a city can issue a permit on a job of $50,000 or more.

The City of Fordyce, Arkansas is the obligee on this $2,500 contractor license bond. The bond is the contractor's promise, backed by a surety company, to follow the city's licensing and building requirements, and it gives the city a source of payment if the contractor does not. It sits alongside state licensing, not in place of it. Confirm the current bond form and filing steps with Fordyce City Hall before the bond is issued.

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How to Apply for a Contractor License ($2,500) Bond:

Confirm the current bond form and filing steps with Fordyce City Hall.
Use the business name exactly as it appears on the city license application.
Complete the bond application and review the quoted premium.
Pay the premium and receive the executed $2,500 bond.
File the signed bond with the City of Fordyce and keep it in force while licensed.

Detailed Information About the Arkansas Contractor License ($2,500) Bond:

The city bond does not replace a state license

Arkansas Code 17-25-101 defines a contractor as someone who bids on or takes charge of construction when the cost of the work is $50,000 or more, except single family residences. Under Arkansas Code 17-25-301, before a city building inspector issues a permit for work of $50,000 or more, the applicant must furnish satisfactory proof of a license from the Contractors Licensing Board. It is unlawful for the inspector to issue the permit without proof of a license or an exemption. A Fordyce bond, whatever its amount, does not meet that rule.

What the bond guarantees

The contractor is the principal, the City of Fordyce is the obligee, and the surety company backs the contractor's obligation for up to $2,500. If a valid claim is made because the contractor failed to meet the city's requirements, the surety pays and the contractor must repay the surety. The bond is not insurance for the contractor.

Before the bond is issued

Call Fordyce City Hall and confirm three things: whether the city uses its own bond form, where the signed original is filed, and when the city license renews. Make sure the business name on the bond matches the name on the city license application exactly.

Eligibility and Requirements for a Arkansas Contractor License ($2,500) Bond:

Bond amount of $2,500.
City of Fordyce, Arkansas named as obligee.
Business name on the bond matching the city license application.
A separate Arkansas Contractors Licensing Board license for work of $50,000 or more, other than single family residences.
Owner credit review as part of underwriting.

Arkansas Contractor License ($2,500) Bond FAQs:

Does this bond replace my Arkansas contractor license?

No. Arkansas Code 17-25-301 requires proof of a state license before a city issues a permit for work of $50,000 or more. The $2,500 city bond is a separate requirement.

Who is the obligee?

The City of Fordyce, Arkansas. The bond protects the city, and through it the public, if the contractor does not meet the city's requirements.

How much is the bond?

This bond is written for $2,500. That is the most the surety will pay on claims, not the price you pay for it.

What happens if someone makes a claim?

The surety looks into it. If the claim is valid, the surety pays up to the bond amount and the contractor repays the surety.

What should I check with the city first?

Ask Fordyce City Hall whether it requires its own bond form, where the original is filed, and when the license renews, so the bond dates line up with the license.