Bonding in Missouri

A surety bond is a 3-party promise. The contractor (the principal) pays a surety company for a bond that a customer, subcontractor, or a government entity (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. Missouri handles bonding very differently from most states, and that difference matters to every trade. Keep the following categories separate. 1. No statewide general contractor license and no statewide GC license bond. Missouri does not issue a statewide general contractor license, so there is no statewide GC license bond to post. Licensing for general construction is handled at the city or county level. A city-issued contractor registration typically requires a local bond; check the ordinance in each jurisdiction where you pull permits. 2. Statewide Electrical Contractor license — insurance and local bonds. Missouri Revised Statutes sections 324.900 to 324.945 created the Office of Statewide Electrical Contractors (OSEC) and the Statewide Electrical Contractor license. Applicants must provide proof of liability insurance of at least $500,000 and must post any bond required by each political subdivision where the contractor performs work. The statewide license itself does not require a single state-level surety bond; the local bond requirements for each jurisdiction continue to apply. Source: Missouri Revised Statutes section 324.920 (https://revisor.mo.gov/main/OneSection.aspx?section=324.920). 3. Plumbing and HVAC bonds — municipal. Missouri has no statewide plumbing or HVAC license. Cities that license these trades set their own bond amounts and conditions. For example, municipal plumbing and mechanical registrations commonly require a local $5,000 to $25,000 bond plus proof of insurance; amounts vary by ordinance. 4. Public works bonds under Missouri Revised Statutes section 107.170. Contracts with Missouri public entities for public works with an estimated cost exceeding $50,000 require the contractor to furnish a bond with good and sufficient sureties in an amount fixed by the public entity. The statute conditions the bond on payment for all materials incorporated, consumed, or used in the construction, all insurance premiums for compensation and other insurance, and all labor performed in the work, whether by a subcontractor, a supplier at any tier, or otherwise. Remote suppliers must give 90-day written notice to recover. Providing the section 107.170 bond precludes mechanic's liens against public property, and any such lien filed in violation is void. Source: Missouri Revised Statutes section 107.170 (https://revisor.mo.gov/main/OneSection.aspx?section=107.170). 5. Private projects and mechanic's liens. On private Missouri projects, subcontractors and suppliers use the mechanic's-lien procedures in Missouri Revised Statutes Chapter 429. An owner or original contractor may post a lien release bond under Chapter 429 to clear title; that is a project-based 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. Public works performance and payment bonds are priced per job, usually 0.5% to 3% of the contract price depending on contract size, job type, and the contractor's financial statements. Bond, insurance, and workers' compensation are separate requirements. A Missouri contractor typically carries city-specific license bonds for each jurisdiction of operation, the OSEC $500,000 insurance certificate if holding the statewide electrical license, general liability and workers' compensation insurance, and statutory performance-and-payment bonds on any qualifying public contract. Confirm each requirement against the current statute and contract before you assume you are compliant.