A general contractor license in North Carolina is a vital credential for contractors to carry out their construction projects. However, obtaining a license does not come easy or cheap. There are numerous financial requirements that contractors must fulfill before they can receive a license to perform construction work in the state.
Here are the financial requirements for a general contractor license in North Carolina:
1. General Liability Insurance
Before applying for a North Carolina general contractor license, the contractor must first obtain general liability insurance. This insurance policy will protect the contractor from any damages or lawsuits brought against them by third parties. The minimum amount of coverage for this type of insurance is $300,000 per occurrence.
2. Worker’s Compensation Insurance
Apart from general liability insurance, a contractor must also acquire worker’s compensation insurance covering all of their employees. This policy provides financial support to employees who are injured on the job or contracts illnesses due to work-related conditions. The minimum coverage amount required for worker’s compensation insurance is $100,000 per occurrence.
3. Financial Statement
A North Carolina general contractor license applicant must prepare and submit a financial statement, duly notarized by a certified public accountant. This document must state the current financial status of the contractor, including all assets, liabilities, and equity.
4. Surety Bond
A surety bond is an agreement between the contractor, the client, and a third-party surety company. This bond protects the client if the contractor fails to complete the project or fulfill their contractual obligations. The minimum surety bond amount required for a North Carolina general contractor license is $10,000.
5. License and Examination Fees
Contractors applying for a North Carolina general contractor license must pay a $100 non-refundable application fee. Additionally, a $200 examination fee must be paid by the contractor to take the licensing test.
In summary, a North Carolina general contractor license requires a substantial financial commitment. Contractors are required to secure general liability and worker’s compensation insurance, prepare a notarized financial statement, obtain a surety bond, and pay both application and examination fees. By fulfilling these financial requirements, contractors can obtain their license, which is an essential credential for legally performing construction work in the state.