Nevada Contractor Bonds

A contractor bond is a type of surety bond that guarantees a contractor will comply with local licensing regulations and operate ethically. It protects the public by ensuring that clients are compensated for damages if the contractor fails to meet their obligations.

Bond pricing is determined based on a soft pull of your credit score.

All contractors applying for a license in Nevada must either post a surety bond or a cash deposit with the NSCB. The amount is set when your license is approved.

Bonds can range anywhere from $1,000 to $500,000. Factors that determine bond amount are:

• License Classification
• Authorized monetary limit
• Financial stability
• Experience and professional character

Yes.

Residential Pool & Spa Contractors:

Must post a Consumer Protection Bond between $10,000 and $400,000, based on risk and operations.

Residential Improvement Contractors (deposit-based):

If accepting a down payment over $1,000 or 10% of contract price, a $100,000 Consumer Protection Bond is required.

The bond must be continuous—there’s no set expiration date. If your bond is canceled, the surety company must give the NSCB 60 days’ notice, and your license will be suspended until you replace it.

They protect project owners from financial losses due to a contractor's failure to perform, bankruptcy, or default. They also ensure that only qualified contractors, who are financially stable and have a proven track record, are awarded contracts. In the event of contractor default, the surety can step in to find another contractor or provide funding to complete the project.

The cost of a performance bond is usually calculated as a percentage of the total contract value, which typically ranges from 0.5% to 3%, depending on: The size and complexity of the project, the contractor's creditworthiness and experience, and the bond amount and terms.

In Nevada, any public works contract over $100,000 requires the winning contractor to furnish both a Performance Bond and a Payment Bond before work begins.These bonds are typically required after you win the bid and sign the contract—your bid bond guarantees you’ll provide them.

A performance bond ensures project completion while a payment bond guarantees that subcontractors, laborers, and material suppliers are paid. They are often issued together.

Mandatory for large public projects: For public works projects in Nevada that exceed $100,000, bidders must include both a bid bond and a certified check or cash deposit of at least 5% of the total bid amount when they submit their bid.

If the project exceeds $100,000, a minimum bid bond of 5% of the bid amount is required by Nevada administrative code.

The bid bond ensures that the successful bidder will execute the contract and provide the necessary performance and payment bonds. If they fail to do so, the owner can claim the bond to cover the difference between the winning bid and the next lowest bid.