Bonding in West Virginia

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. West Virginia uses bonds in three places that contractors commonly confuse. Keep them separate. 1. WV Contractor Licensing Board — no uniform statewide license bond. The West Virginia Contractor Licensing Board licenses general and specialty contractors (including HVAC, Plumbing, Electrical Contractor) for projects at the threshold set by Board rule. The Board does not impose a uniform statewide surety bond on every contractor license; the standard requirement is the $90 application fee and the trade and Business and Law exams. Source: WV Contractor Licensing Board (https://wvclboard.wv.gov/). 2. State Fire Marshal and Division of Labor — no uniform state license bond. The WV State Fire Marshal (electricians) and WV Division of Labor (plumbers and HVAC technicians) do not impose a uniform statewide surety bond on individual trade-worker certifications. Source: WV State Fire Marshal (https://firemarshal.wv.gov/regulatory-and-licensing-division); WV Division of Labor (https://labor.wv.gov/). 3. Public works payment and performance bonds (Little Miller Act, W. Va. Code 5-22-1). West Virginia's Little Miller Act (W. Va. Code 5-22-1) requires a performance and payment bond on public construction contracts. Published industry summaries indicate the threshold is $100,000 (some jurisdictions use $25,000 for smaller public entities; verify against the statute). Bonds each equal 100 percent of the contract amount. The performance bond runs to the governmental entity; the payment bond protects subcontractors and suppliers. Subcontractors on a bonded public job perfect claims against the payment bond rather than lien public property. Source: W. Va. Code 5-22 (https://code.wvlegislature.gov/). Premium math. A surety charges an annual premium, typically 1 to 3 percent 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 percent or more. Public works payment and performance bonds are priced per job, usually 0.5 to 3 percent of the contract price. Bond, insurance, and workers' compensation are separate requirements. A West Virginia contractor carries bonds only when a public contract or local ordinance triggers them, general liability insurance at limits required by the Contractor Licensing Board or project owner, and workers' compensation coverage under W. Va. Code Chapter 23 (workers' compensation is mandatory for most West Virginia employers regardless of employee count; coverage is provided by private-market carriers after the 2005 reform).