Bonding in Florida

A surety bond is a 3-party promise. The contractor (the principal) pays a surety company for a bond that a customer, subcontractor, or the state (the obligee) can draw against if the contractor breaks the rules the bond covers. The surety pays valid claims up to the bond face value. The contractor then owes the surety for what the surety paid out. A bond protects the public. It is not insurance for the contractor. Florida uses bonds in 3 distinct places, and contractors regularly confuse them. Keep them separate. 1. CILB financial responsibility bond. The Construction Industry Licensing Board can require a surety bond as part of the financial responsibility showing for a contractor license, under Florida Statute 489.115(5)(b). The statutory ceiling is $20,000 for Division I certificateholders (general, building, residential) and $10,000 for Division II certificateholders (specialty trades: plumbing, mechanical, air conditioning, roofing, sheet metal, pool, solar, and others). The statute allows applicants to satisfy 50% of the financial responsibility requirement by completing a 14-hour financial responsibility course approved by the board. The bond is paid to the state and covers unpaid civil judgments, liens, or board-ordered restitution arising from the contracting work. 2. Public construction payment and performance bonds (Little Miller Act). Florida Statute 255.05 requires a contractor on a public building or public works contract to post a payment and performance bond before starting work. The bond amount equals the contract price. These bonds protect public owners and subcontractors on that specific project. They are not the CILB license bond and are not tied to license issuance. 3. Private construction lien transfer bonds. A contractor or owner can file a bond under Florida Statute 713 to transfer a claim of lien off a property to the bond. This is a project-specific mechanic's-lien tool, not a license bond. Premium math. A surety charges an annual premium, typically 1% to 3% of the bond face value for a contractor with strong credit and no prior claims. Weaker credit, tax liens, prior surety losses, or a new business can push the rate to 5% to 10% or more. A $20,000 Division I bond at 2% is $400 per year. A $10,000 Division II bond at 2% is $200 per year. Project payment and performance bonds are priced per job, usually 0.5% to 3% of the contract price. What claims look like. For a CILB bond, a claimant files a complaint with DBPR. If a board order results in unpaid restitution or a court issues an unpaid judgment within the bond's coverage, the claimant can seek recovery from the bond. The surety pays, then pursues the contractor. Bond, insurance, and workers' compensation are separate requirements. A Florida contractor carries the CILB bond or financial responsibility showing, public liability and property damage insurance at CILB minimums under rule 61G4-15.003, and workers' compensation at the construction-industry threshold. Confirm each requirement against the current rule before you assume you are compliant.