Surety Bond Encyclopedia

Commercial Specialty Contractor Level 2 ($25,000) Bond - Statewide in Oregon

Brief Summary

For a commercial outfit that sticks to one or two trades, the Level 2 specialty endorsement comes with a $25,000 bond and a $500,000 per occurrence insurance minimum, compared with $55,000 and $1 million aggregate at Level 1. Once your key employees have four combined years of experience, the bond is a routine filing you can have in hand before the license application goes in.

A Commercial Specialty Contractor Level 2 in Oregon must file a $25,000 surety bond with the Construction Contractors Board under ORS 701.084, carry at least $500,000 per occurrence in liability insurance, and have key employees with a combined four years of experience. The bond was $20,000 before House Bill 2922 took effect on January 1, 2024.

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How to Apply for a Commercial Specialty Contractor Level 2 ($25,000) Bond:

Confirm your work is limited to one or two unrelated building trades on commercial projects.
Document key employees with a combined total of at least four years of experience.
Use the exact entity name on file with the Oregon Corporation Division.
Apply for the bond and approve the quoted premium after the surety's credit review.
Get the $25,000 CCB Commercial Surety Bond signed by the surety's attorney-in-fact with the power of attorney attached.
File it with your license application within 60 days of the date on the bond.

Detailed Information About the Oregon Commercial Specialty Contractor Level 2 ($25,000) Bond:

What specialty means at the CCB

A commercial specialty endorsement covers one or two unrelated building trades on commercial projects. A firm that takes on an unlimited number of unrelated trades belongs under a commercial general endorsement instead.

Level 1 and Level 2 specialty contractors do the same work. Level 1 requires eight years of combined key employee experience, $1 million in aggregate liability insurance and a $55,000 bond. Level 2 requires four years, $500,000 per occurrence and a $25,000 bond.

How the bond behaves

ORS 701.068 requires the bond to come from a corporate surety authorized to do business in Oregon. The CCB form makes it effective when the contractor meets the licensing requirements, and it stays continuously in force until claims deplete it or the surety cancels with 30 days' written notice to the contractor and the CCB. It exists to pay determination orders of the Construction Contractors Board, and the surety's combined liability for all complaints stops at the $25,000 penal sum.

Who can claim against it

The CCB accepts complaints from property owners, prime contractors, subcontractors, material suppliers and employees with wage disputes. On large commercial projects the claimant must go to court or binding arbitration first. Some small commercial claims go through CCB mediation after a 30-day pre-complaint notice sent by certified mail.

Cash is not an option for most firms

Oregon allows a letter of credit or a cash deposit in place of this bond only for nonprofit organizations rehabilitating illegal drug manufacturing sites, under ORS 701.088. Everyone else files a surety bond.

Eligibility and Requirements for a Oregon Commercial Specialty Contractor Level 2 ($25,000) Bond:

Bond amount of $25,000, raised from $20,000 on January 1, 2024.
Liability insurance of at least $500,000 per occurrence.
A responsible managing individual for the business.
Obligee is the State of Oregon through the Construction Contractors Board.
A separate residential surety bond if the business also holds a residential endorsement.
License term of two years under ORS 701.063.

Oregon Commercial Specialty Contractor Level 2 ($25,000) Bond FAQs:

Is $25,000 enough for a Level 1 specialty contractor?

No. Commercial Specialty Contractor Level 1 requires a $55,000 bond and $1 million in aggregate liability insurance. The $25,000 bond applies only to Level 2, which needs four years of combined key employee experience instead of eight.

Can I post cash or a letter of credit instead?

Only in one narrow case. ORS 701.088 lets nonprofit organizations that rehabilitate illegal drug manufacturing sites substitute a letter of credit or cash deposit. Other commercial specialty contractors file a surety bond.

Does the bond renew every year?

The CCB bond form keeps the bond continuously in effect until it is depleted by paid claims or the surety cancels it. The license itself runs two years. Your surety bills the premium on its own schedule to keep the bond in force.

What happens if the surety cancels?

The surety must give 30 days' written notice to you and the CCB. The license requires a bond on file, so line up a replacement bond before the cancellation takes effect.

Who can file a claim on my bond?

Property owners, prime contractors, subcontractors, material suppliers and employees owed wages can bring complaints to the CCB. Large commercial disputes must start in court or binding arbitration. The surety never pays more than $25,000 in total across all complaints.