Surety Bond Encyclopedia

Contractor License ($10,000) Bond - City of Louisville, KY in Kentucky

Brief Summary

Read this before you buy. In Louisville Metro the $10,000 contractor bond is the WRECKING contractor Type A bond, set by Louisville Metro Code 150.094 for demolition work. A general building contractor does not post a bond here at all, because LMCO 150.084 does not require one. And if the structure you are taking down is 35 feet or taller, two stories or more, or 3,000 square feet or larger, you are Type B and the figure is $25,000, not $10,000.

Louisville Metro Code of Ordinances 150.094 requires a wrecking contractor to deliver a bond to the Director before an identification number is issued. Type A identification covers contractors wrecking structures less than 35 feet in height, or two stories, and or less than 3,000 square feet, and carries a bond in the minimum sum of $10,000. Type B covers everything that does not meet the Type A limits and carries a bond in the minimum sum of $25,000. Both are payable to Louisville Metro Government. The general building contractor section, LMCO 150.084, carries no bond requirement.

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How to Apply for a Contractor License ($10,000) Bond:

Confirm you are actually a wrecking contractor. This bond comes from LMCO 150.094. A general building contractor under LMCO 150.084 posts no bond.
Work out your type. Type A is structures under 35 feet in height, or two stories, and or under 3,000 square feet, and carries the $10,000 bond. Anything outside that is Type B at $25,000.
Legal business name exactly as it will appear on the Louisville Metro identification.
Owner or principal information and authorization for a credit review.
Complete the bond application, review the quoted premium, and pay it.
Have the bond written payable to Louisville Metro Government and delivered to the Director.
Confirm the surety will give the Department 30 days written notice before any cancellation, as LMCO 150.083(G) requires.
Line up the matching insurance. Type A needs at least $300,000 per occurrence and $600,000 aggregate. Type B needs at least $1,000,000 and $2,000,000.
Name both your business and Louisville Metro Government as insured on the liability and property damage cover.
Employ a wrecking supervisor as full time staff. This is a separate requirement and it does not replace the bond.
Get the occupational license from the Revenue Commission of Jefferson County and file the workers compensation and unemployment evidence, or the notarised affidavit if you have no employees.
Diary the renewal. Under LMCO 150.083(I) a lapse of more than a year means reexamination plus the accumulated fees.

Detailed Information About the Kentucky Contractor License ($10,000) Bond:

This is a demolition bond, not a building contractor bond

Worth settling first, because it decides whether the page you are reading applies to you at all.

Louisville Metro licenses and identifies contractors under Chapter 150 of its Code of Ordinances, and the chapter has a separate section for each trade. LMCO 150.084 covers general building contractors. Read it and there is no bond in it. LMCO 150.094 is titled Wrecking Contractor Identification and License Requirements, and that is where the $10,000 comes from.

So a builder putting up houses in Jefferson County is not looking for this. A contractor tearing structures down is.

Type A or Type B, and the line between them

The amount is not one figure. There are two, and the threshold is written into the ordinance.

Type A identification is for contractors wrecking structures less than 35 feet in height, or two stories, and or less than 3,000 square feet. That tier requires a bond in the minimum sum of $10,000 payable to Louisville Metro Government.

Type B identification is for contractors wrecking structures that do not meet the requirements of Type A. That tier requires a bond in the minimum sum of $25,000, also payable to Louisville Metro Government.

Note the word minimum in both. The ordinance sets a floor rather than a fixed sum.

The insurance moves with the tier too

This is where an operator can get caught taking one job outside their type.

A Type A wrecking contractor carries commercial general liability and property damage cover of not less than $300,000 for any one occurrence and $600,000 aggregate. A Type B contractor carries not less than $1,000,000 for any one occurrence and $2,000,000 aggregate. The identified contractor and Louisville Metro Government are both named as insured.

So stepping up from a small teardown to a four story building is not a small paperwork change. It is a different identification, a bond two and a half times the size, and roughly triple the insurance limits.

Who the bond protects

Louisville Metro. The city describes the bond as protecting Louisville Metro from losses caused by work that violates state law or local ordinance.

That framing matters when you are weighing the cost. This is not a warranty to your customer and it is not insurance for your own losses. It is the city making sure it is not left paying to clean up after a demolition that went wrong or was done without the right permits.

A wrecking supervisor is required, and it is not a substitute

Each identified wrecking contractor must employ a wrecking supervisor as a full time member of staff. The supervisor has separate exam, experience and fee requirements that Louisville Metro publishes on its own page.

Having one does not reduce or waive the bond. They are two separate requirements and you need both.

Cancellation and renewal will bite if you ignore them

LMCO 150.083(G) requires the surety company to notify the Department in writing of any intention to terminate or cancel the bond at least 30 days before the cancellation takes effect. The same 30 day notice applies to the insurance, under the endorsement Louisville Metro requires, referencing KRS 304.20-304.320.

The renewal trap is in 150.083(I). A licensee who does not renew within one year has to be reexamined and pay the accumulated fees. Letting a wrecking identification sit lapsed for a year costs you the exam again, not just a late fee.

What else you have to have

Identification is not the only piece. Louisville Metro also expects a certificate of insurance with the Office of Construction Review listed as the certificate holder, evidence of compliance with Kentucky workers compensation and unemployment insurance, or a signed and notarised affidavit if you have no employees, and a separate occupational license from the Revenue Commission of Jefferson County.

An identification cannot be assigned or transferred, and any change of ownership, business name or address has to be reported to the Department within five working days.

Eligibility and Requirements for a Kentucky Contractor License ($10,000) Bond:

A bond in the minimum sum of $10,000 for Type A, or $25,000 for Type B, under LMCO 150.094.
Payable to Louisville Metro Government, delivered to the Director before identification is issued.
Commercial general liability and property damage insurance of at least $300,000 per occurrence and $600,000 aggregate for Type A, or $1,000,000 and $2,000,000 for Type B.
The identified contractor and Louisville Metro Government both named as insured.
Surety notice to the Department at least 30 days before any cancellation of the bond.
A wrecking supervisor employed as a full time member of staff.
Evidence of compliance with Kentucky workers compensation and unemployment insurance, or a signed notarised affidavit if there are no employees.
An occupational license from the Revenue Commission of Jefferson County.
Business name on the bond matching the Louisville Metro identification exactly. Identifications cannot be assigned or transferred.

Kentucky Contractor License ($10,000) Bond FAQs:

I am a general contractor in Louisville. Is this my bond?

Almost certainly not. The $10,000 figure comes from LMCO 150.094, which is the wrecking contractor section. LMCO 150.084, the general building contractors section, contains no bond requirement. If you build rather than demolish, check with the Office of Construction Review what your category actually needs before buying anything.

Is it $10,000 or $25,000?

It depends on what you are tearing down. Type A identification is for contractors wrecking structures less than 35 feet in height, or two stories, and or less than 3,000 square feet, and the bond is a minimum of $10,000. Type B is for structures that do not meet the Type A limits, and the bond is a minimum of $25,000. Both are payable to Louisville Metro Government.

Can I buy the Type A bond and just take a bigger job occasionally?

No, and it is more expensive than it looks to get wrong. Moving to Type B changes the identification, more than doubles the bond, and raises the insurance from $300,000 and $600,000 to $1,000,000 and $2,000,000. Take the job under the wrong identification and you have a permit problem and a coverage gap at the same time.

Does the ordinance set the bond, or can the city ask for more?

The ordinance says minimum sum in both places, so $10,000 and $25,000 are floors rather than fixed figures. If your file is unusual, confirm the amount with the Office of Construction Review rather than assuming the published minimum is what they will accept.

Who does the bond protect?

Louisville Metro. The city describes it as protecting Louisville Metro from losses caused by work that violates state law or local ordinance. It is not a warranty to your customer and it is not insurance for your own losses. If the surety pays, it comes back to you for reimbursement.

I have a wrecking supervisor on staff. Does that cover the bond?

No. Employing a wrecking supervisor as a full time member of staff is its own requirement under the wrecking contractor rules, with separate exam, experience and fee requirements for the supervisor. It sits alongside the bond rather than replacing it.

What does the bond cost?

You pay an annual premium rather than the $10,000. At this size the premium is driven mainly by the owner's personal credit, and a municipal bond of $10,000 is a small exposure. Rates vary enough by credit that publishing a percentage here would be misleading rather than helpful, particularly since demolition is underwritten more cautiously than ordinary trades. Get your actual number.

What happens if my surety cancels?

The surety has to notify the Department in writing at least 30 days before the cancellation takes effect, under LMCO 150.083(G). That gives you a window to replace it. LMCO 150.083(D) lists failure to maintain required insurance or bonds among the causes for which an identification may be revoked or suspended, so the window is the whole of your protection.

What if I let my identification lapse?

Under LMCO 150.083(I), a licensee who does not renew within one year has to be reexamined and pay the fees that accumulated in the meantime. That is a real cost, so treat the renewal date as a hard date rather than something to catch up on later.

What else do I need besides the bond?

A certificate of insurance with the Office of Construction Review as certificate holder, evidence of compliance with Kentucky workers compensation and unemployment insurance or a signed and notarised affidavit if you have no employees, and a separate occupational license from the Revenue Commission of Jefferson County. Your identification cannot be assigned or transferred, and any change of ownership, business name or address has to reach the Department within five working days.