TLDR: Whether you are new to the contractor trade or have been in the business for a long time, contractor bond is required for your license. One of the questions that have been asked a lot by contractors is what companies should they choose. Contractor Bonding Companies can be referred to both independent agencies and contractor bond carriers. This article will explore the question for both independent agencies as well as contractor bond carriers. Generally, a contractor bond company can be judged in terms of price, customer service, and financing options.
We chose the top contractor bonding companies from a field of dozens by selecting companies that excel in a given category. Just like with other types of insurance, the best surety carrier for another contractor may not be the best for you. For example, some contractors may have a high credit score which makes them a perfect applicant for company A but another contractor with a low credit score will never be accepted by company A.
Below are the top 5 picks for contractor bonding carriers.
Hudson Surety is a subsidiary of Hudson Insurance Group, which is a specialty insurance company headquartered in New York City. Since 2007, Hudson Surety has been providing a broad range of Surety Bonds in all 50 states. With offices in CA, Hudson can respond to any surety bond underwriting requirement in a timely manner. It offers the best rate at 0.55% for contractors with a good credit score (700+) and no prior claims. From our experience, it beats any competitor in terms of pricing. If your credit score is above 700, you can get a one-year bond for as low as $100.
In addition to the most affordable rates that Hudson offers, they also have some of the most experienced underwriters, most with over 20 years of experience in the industry.
CNA Surety, formed as a result of CNA Financial Corporation acquiring Western Surety in 1992, is one of the largest surety companies in the country. Headquartered in Sioux Falls, South Dakota and has 100 years of history writing surety bonds, thereby making it one of the oldest surety carriers. It also has a network of 40,000+ agencies across the country, making it one of the most prolific providers of contractor bonds. As a subdivision within CNA Insurance, CNA Surety is blessed with the financial strength of the behemoth CNA Insurance. Because of this financial strength, CNA Surety offers the most competitive rate for contractors with a lower credit score (lower than 650). Oftentimes, even if the candidates had some issues in their credit (i.e., missed payment), CNA Surety can still accept the applicant and offer a relatively competitive rate whereas other surety companies probably will decline the same candidate.
With over 90 years of experience, Merchant Bonding Company is one of the few insurance companies specializing in surety bonds. Even though Merchant is not the largest issuer of contractor bonds, it has an outstanding digital platform for e-bonding. All California Contractor License Bonds can be e-filed online using an easy-to-use digital platform. Once your bond is filed to the Contractor State Licensing Board of California, Merchant’s digital platform will inform you through email, giving you peace of mind. However, Merchant Bonding Company’s focus is on the contractor license & permit bonds but does not offer much contract bonds such as bid bonds, performance bonds, payment bonds, maintenance bonds, and supply bonds.
Acquired by HCC in 2003, American Contractor Indemnity Company, as the name suggests, is a specialty carrier that provides surety bonds to the construction industry. Headquartered in Los Angeles, American Contractor Indemnity Company was the biggest issuer of California contractor license bonds in 2022. It is a part of Tokio Marine HCC
Contractor bond prices have gone up significantly over the years, especially California contractor bonds. As a result, financing options make life easier for contractors. American Contractors Indemnity Company offers a 20% down payment and 9 subsequent monthly payments to pay for contractor bond premium.
Headquartered in Bala Cynwyd, Pennsylvania, Philadelphia Insurance Companies offered a wide range of commercial Property/Casualty and Professional Liability insurance products. Surety Bonds is a small part of its overall business. It is rated “A++ (Superior) by A.M. Best Company, which makes it one of the few surety companies to earn this honor, reflecting its financial strength. Due to this financial strength, Philadelphia Insurance offers contractor bonds for contractors with sub-standard (550-600) and non-standard (below 550) credit scores.
After talking about insurance carriers, we should also talk about the independent agencies. Unlike carriers who underwrite policies, agencies distribute the policies written by carriers to individuals wanting to be insured. Agencies are generally the only party that contractors directly interact with so it is important that contractors are working with a knowledgeable and trustworthy agency
Bond premium price
Knowledge about the industry
The online quoting / bonding platform
Unrivaled customer service
Offer the lowest price in the industry
Deep expertise in the bonding and contractor industry
Quoting platform is the state of the art, easiest to use website in the industry
Surety Agency: a company that provides surety bonds to individuals, businesses, and other organizations on behalf of the surety carriers. Most of the time, surety carriers won’t sell surety bonds directly to end users
Surety Carrier: a company that underwrites surety bonds. Surety carriers are typically insurance companies that specialize in providing surety bonds to businesses and individuals.