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Colorado Contractor License Bonds

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Understanding Colorado Contractor Bonding Requirements

Colorado operates under a local licensing system for contractors, with no statewide license requirement. Instead, municipalities and counties throughout Colorado establish their own contractor licensing and bonding requirements, creating a decentralized regulatory framework.

Municipal Contractor License Bonds

Major Colorado municipalities require contractors to obtain local licenses and post surety bonds before performing construction work. Common requirements include:

  • Denver: Contractor registration with bonds for general and specialty contractors
  • Colorado Springs: Local licensing for residential and commercial construction trades
  • Aurora: Building permits and contractor bonds for various construction activities
  • Fort Collins, Boulder, Lakewood: Municipal licensing with bond requirements
  • Typical bond amounts: $5,000 to $25,000 depending on municipality and scope

These bonds protect property owners and ensure contractors comply with local building codes, complete contracted work, and pay subcontractors and suppliers.

Public Works Bonds - Colorado Little Miller Act

Contractors bidding on Colorado public works projects must comply with the Colorado Little Miller Act (C.R.S. § 38-26-106), which requires:

  • Performance bonds: Guarantee project completion according to contract terms
  • Payment bonds: Ensure subcontractors and suppliers are paid
  • Threshold: Required for public works projects exceeding $50,000
  • Bond amount: Typically 100% of the contract value

Important:

Municipal license bonds and public works bonds serve different purposes. Contractors working in multiple jurisdictions need separate bonds for each municipality, plus performance and payment bonds for public projects.

How Much Do Colorado Contractor Bonds Cost?

Colorado contractor bonds typically cost $100 to $500 annually for municipal license bonds, representing 1% to 3% of the total bond amount. The premium you pay depends on several underwriting factors.

Municipal License Bond Pricing:

  • $5,000 bond:$100-$150/year
  • $10,000 bond:$100-$300/year
  • $15,000 bond:$150-$450/year
  • $25,000 bond:$250-$750/year

Factors Affecting Your Premium:

Personal Credit Score

Higher credit scores qualify for significantly lower rates, often 1-1.5% of bond amount

Business Financials

Strong financial statements demonstrate stability and reduce underwriting risk

Contractor Experience

Established contractors with proven track records receive preferential rates

Bond Amount Required

Larger bond amounts typically have lower percentage rates

How to Get Your Colorado Contractor Bond
  1. 1

    Verify Your Bond Requirements

    Contact your local building department to confirm exact bond amount and requirements

  2. 2

    Complete Bond Application

    Submit basic business information and personal credit authorization

  3. 3

    Receive Quote & Approval

    Most approvals within 24 hours with competitive rate quotes

  4. 4

    File Your Bond

    Receive bond electronically for immediate filing with your municipality

Frequently Asked Questions
Does Colorado require a state contractor license bond?
Colorado does not require a statewide contractor license or bond. However, many municipalities and counties throughout Colorado require local contractor licenses with surety bonds. Additionally, public works projects typically require performance and payment bonds as specified in the Colorado Little Miller Act.
Which Colorado cities require contractor bonds?
Major Colorado cities requiring contractor bonds include Denver, Colorado Springs, Aurora, Fort Collins, Lakewood, Thornton, and Boulder. Each municipality sets its own bond requirements and amounts, typically ranging from $5,000 to $25,000. Contact your local building department to verify specific requirements for your area.
How much does a Colorado contractor bond cost?
Colorado contractor bonds typically cost $100 to $500 annually, representing 1-3% of the total bond amount. For a $10,000 bond, contractors with excellent credit pay $100-$150/year, while those with fair credit may pay $200-$300/year. Costs vary based on credit score, business financials, and contractor experience.
What is the Colorado Little Miller Act?
The Colorado Little Miller Act requires performance and payment bonds on public works projects exceeding $50,000. These bonds protect subcontractors, suppliers, and laborers on government construction projects. The performance bond guarantees project completion, while the payment bond ensures subcontractors and suppliers are paid.
Do I need a bond to work in Denver?
Denver requires contractor registration and bonding for various construction activities. Requirements depend on the type of work and project scope. General contractors, specialty contractors, and home improvement contractors may all need bonds ranging from $10,000 to $25,000. Check with Denver Building and Safety for specific requirements.
What contractors need bonds in Colorado Springs?
Colorado Springs requires contractor licensing and bonding for residential construction, remodeling, and specialty trades. Bond amounts vary by trade and scope of work, typically ranging from $5,000 to $15,000. The city issues licenses for general contractors, electrical, plumbing, HVAC, and other specialty trades.
How long does it take to get a Colorado contractor bond?
Colorado contractor bonds can be issued within 24 hours for applicants with good credit. The application requires basic business information, personal credit authorization, and details about your local license or registration. Once approved, bonds are delivered electronically for immediate filing with the municipality.
Are Colorado contractor bonds renewable?
Yes, Colorado contractor bonds have annual terms and must be renewed to maintain active licensing status with municipalities. Renewal premiums may decrease with improved credit scores and clean claims history. Most sureties send renewal notices 30-60 days before expiration to ensure continuous bond coverage.
What happens if a claim is filed against my Colorado contractor bond?
When a claim is filed, the surety company investigates to verify validity. If the claim is legitimate, the surety compensates the damaged party up to the bond amount. The contractor is then legally obligated to reimburse the surety for all paid claims plus investigation costs. Claims can significantly impact future bonding ability and premium rates.
Contractor Bonds in Other States
ArizonaCaliforniaFloridaGeorgiaIllinoisMichiganNevadaTexas
Colorado Contractor Resources
Written by BuySuretyBonds.com
Licensed surety bond agency operating nationwide with direct integrations to Treasury-certified surety carriers. Our platform enables instant approval for license and notary bonds, with 24-48 hour underwriting for commercial bonds. All content is researched from official state and federal sources (.gov) and reviewed by licensed insurance professionals.
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