Brief Summary
A $20,000 bond lets a Group 1 general contractor meet South Carolina's financial requirement without filing a financial statement. Instead of documenting $20,000 of net worth or $10,000 of working capital on the Board's owner-prepared form, you file one executed bond with the Contractor's Licensing Board and keep that equity working in the business.
South Carolina Code 40-11-262 lets a general contractor applicant file a surety bond in place of the financial statement required by Section 40-11-260. For Group 1, which caps each bid and job at $100,000, the bond equals the Group 1 net worth figure of $20,000. It lists the State of South Carolina as obligee, protects anyone damaged by the contractor's breach of a construction contract or unlawful acts in performing construction, and follows the 24 month license term that ends October 31 of even-numbered years.
We can help with all South Carolina bonds!
Detailed Information About the South Carolina General Contractor License Group 1 ($20,000) Bond:
Group 1 in plain numbers
South Carolina sorts general contractors into five financial groups under Section 40-11-260. Group 1 is the entry level. Bids and jobs are limited to $100,000 each, and the applicant needs a net worth of $20,000 or working capital of $10,000. Without a bond, a Group 1 applicant proves that with an owner-prepared financial statement on a form prescribed by the Board, signed with an affidavit of accuracy, at initial licensure and again at renewal.
Section 40-11-262 offers the other route. The applicant files a bond from a surety authorized to transact surety business in South Carolina, in the same amount as the net worth for the license group. That is why the Group 1 bond is $20,000 and not $10,000. The working capital figure plays no part in sizing it.
Who needs a license in the first place
Under Section 40-11-30 a license is needed for general or mechanical contracting where the total cost of construction is greater than $10,000. Section 40-11-360 lists exemptions, among them certain owner-builders and work on federal property, so read that list before you apply.
What the bond covers
The bond is for the benefit of any person damaged by the contractor's breach of a construction contract, breach of a contract to furnish labor, materials or professional services for construction, or any unlawful act or omission in performing construction. The statute also says it is in addition to, and not in lieu of, any other bond required by law, by regulation or by a party to a contract. A Group 1 license bond does not stand in for a performance or payment bond an owner asks for on a particular job.
Term, renewal and cancellation
The Board's General Contractors Surety Bond form (Rev. 6/29/2023 V1.3) ties the bond to the license term, a 24 month period beginning November 1 and ending October 31. General contractor licenses expire October 31 of even-numbered years and renew biennially under Section 40-11-250. Either the surety or the principal may cancel by written notice to the Board and the other party at least 30 days before the effective date.
When Group 1 is too small
If a single job will run past $100,000, Group 1 will not carry it. Group 2 raises the cap to $400,000 per job with a $60,000 bond, and the bond amounts for Groups 3, 4 and 5 are $150,000, $250,000 and $350,000.
+1 815-826-6324 (815-8-BondAI) 
phil@AmericasSuretyBonds.com
