Surety Bonds

Bound for Growth: Home Construction Businesses


With the demand for homes outpacing inventory, now’s a great time to start or expand your contracting business.

Understanding the New Demand for Housing

In 2020, many people discovered they didn’t need to be close to the office or even school, but they did yearn to be closer to family and enjoy more private space. These discoveries, as Construction Executive explains, are fueling a demand for new housing:

Among the most buoyant segments at present is owner-occupied housing. With more and more Millennials coming of age coupled with the high rate of people looking to social distance, to take advantage of record low mortgage rates and to acquire enough space for a home office, housing demand has raced even higher during the pandemic. But that surging demand has crashed into a dearth of available, unsold inventory, resulting in rapidly rising home prices and the highest homebuilder confidence on record.

 Build, Build, Build!

If you are a home building or home remodeling contractor, expect to be busy, even with the shortage of materials and safety procedures you will need to address as you take on more projects in 2021. You may even find it’s time to expand your business—and if you have not yet started one, in many respects, you may never find a better time to do so. U.S. News reports that some experts are predicting housing starts throughout 2021 will be up 9% over 2020, with new homes not being built fast enough to meet demand.

As you gear up for busy times in home construction, make sure you have a current contractor’s license bond that complies with your local requirements. Importantly, your license bond serves as a guarantee to the public that your business operates in accordance with all applicable regulations. You can obtain your contractor’s license bond easily, quickly and affordably from Colonial Surety Company, a leading, direct, national provider of Contractor’s License Bonds.

Understanding the Difference Between License Bonds and Insurance

 To be licensed as a contractor, your state likely requires you to have both a license bond—and various types of insurance. Generally, insurance protects your business. On the other hand, a license bond is a type of surety bond—it represents your commitment to the public that your business is run in accordance with the relevant laws. As Construction Executive further explains:

The bond places conditions on contractors to comply with state and federal laws and regulations for contractors. If a contractor violates the law, the licensing board may file a claim against the bond. Typically, state law also specifies the particular violations that are covered by the contractor license bond.

 When a claim is made against the bond, it is investigated by the surety. If the surety concludes the claim is legitimate, it will usually pay compensation to claimants, up to the full amount of the bond. In turn, the bonded contractor must then repay the surety for the compensation it has extended. The contractor remains liable for his obligations, even though the surety company initially covers the claim. This is why bonds are equated to a line of credit, rather than insurance.

Obtain Your Contractor’s License Bond From National Experts

 In business since 1930, Colonial Surety Company is both a surety bond expert and a tech innovator. Contractors from across the country are invited to use Colonial’s efficient, self-service, online platform to obtain their license bonds—instantly!

With a portfolio of over 4,000 license and permit bonds, available digitally, Colonial can help contractors in every field: electrical, plumbing, gutters, driveways—and more. If you are building or repairing homes or any aspect of them—rest assured, Colonial’s got the bond for that—and we make it easy and affordable for you to obtain it.

Learn more and get bonded for the New Year now: License Bonds for Contractors

Colonial Surety Company is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed and in business all across the country.