SC General Contractor's Bonds: Requirements, Costs, and How to Apply

What is a South Carolina general contractor license bond?

A South Carolina general contractor license bond is a surety bond that a general contractor can file with the South Carolina Contractor's Licensing Board (CLB) instead of a financial statement proving working capital or net worth. The bond amount matches the net worth required for the contractor's license group, from $20,000 for Group 1 to $350,000 for Group 5. It protects anyone damaged when the contractor breaches a construction contract or acts unlawfully on a job. The bond involves three parties: the contractor (the principal), the surety that issues the bond, and the State of South Carolina (the obligee), on behalf of the people the bond protects.

Key facts

Who needs a South Carolina general contractor license bond?

South Carolina requires a CLB license for general contracting when the total cost of the work is more than $10,000. Every licensed general contractor must show financial responsibility at application and at each license renewal. The bond is optional: a contractor can meet either the working capital or the net worth figure for their group with a financial statement, or file a surety bond for the group amount instead. The group sets the largest single job the contractor can bid or perform.

These limits took effect May 19, 2023 under Act No. 69 (H.4115). Older guides that list a $5,000 licensing threshold, $50,000 Group 1 limits, or bonds at two times net worth are out of date. Residential builders and residential specialty contractors are licensed separately by the Residential Builders Commission, and the CLB does not accept bonds written to that Commission.

How does a contractor get licensed in South Carolina?

A South Carolina general contractor gets licensed by naming a qualifying party who passes the required PSI exams, proving financial responsibility for the chosen license group, and filing an application with the Contractor's Licensing Board. The Board reviews the qualifying party, the company's registration, and its financial statement or bond before issuing the license.

1. Choose the classification and group. Pick the classification or subclassification that covers the work (Building, Highway, Specialty and others) and the financial group that covers the largest job the firm will bid.
2. Register the business. Corporations and LLCs need proof of authority from the South Carolina Secretary of State: a Certificate of Existence for in-state entities or a Certificate of Authority for out-of-state entities. Sole proprietors are exempt.
3. Name a Primary Qualifying Party (PQP). The PQP must be actively involved in the business and pass the PSI exams, including the South Carolina Business Management and Law exam and the technical exam for the classification. A few subclassifications, such as Masonry and Miscellaneous Metals, don't require a technical exam.
4. Prove financial responsibility. Submit a balance sheet dated within 12 months that meets the group's working capital or net worth figure, or file the surety bond for the group amount.
5. Apply to the CLB. File the General Contractor Application (Doc. 165) with the $350 application fee, the PQP documents (Doc. 168), exam results, Secretary of State documents, and the financial statement or bond.
6. Receive and renew the license. General contractor licenses expire October 31 of even-numbered years. Renewal costs $135 and requires a current financial statement or a bond on file.

2026–2028 renewal deadlines

The 2024–2026 general contractor licenses expire October 31, 2026. Renewals postmarked by that date avoid a late fee. Contractors renewing with a bond should confirm the bond amount matches their group and that the Board has a current bond or continuation certificate on file.

How much does a South Carolina general contractor license bond cost?

The premium for a South Carolina general contractor license bond typically ranges from 0.75% to 10% of the bond amount per year. The bond must expire concurrently with the license, so the premium is usually paid up front for the two year license term. The final rate is based on the owner's credit and experience; larger bonds for owners with weaker credit may also require business financials or collateral. Estimated annual premiums by group:

Owners with challenged credit (below 600) typically see rates of 5% to 10%.

Circle Surety can provide quotes for these and many other bonds through our online portal.

How to get a South Carolina general contractor license bond

1. Confirm the group. Make sure the firm is applying for or renewing a general contractor license and wants to use the bond instead of a financial statement. Match the bond amount to the license group
2. Gather the firm details. Use the firm's exact legal name and address as they appear on the CLB application. South Carolina requires contractors to do business under the exact name on the license
3. Apply online. Fill out the short form below, as the contractor or on your client's behalf. A soft credit check is required to determine the final premium. Larger bond amounts may require financial review or additional information on the contractor’s experience
4. Pay and receive the bond. The bond is issued on the CLB Surety Bond for General Contractors form with the surety's power of attorney attached. This usually only takes a few minutes after payment is completed. These bonds can often be issued without the need for a signed indemnity agreement if the bond amount is less than $75,000
5. Sign the bond. The contractor signs as principal, and the surety's attorney-in-fact signs for the surety
6. File with the CLB. Submit the original bond with the initial or renewal application to the Contractor's Licensing Board

What out-of-state contractors need to know

Contractors based in another state follow the same licensing steps as South Carolina firms, with a few added requirements.

• Register with the Secretary of State. Out-of-state corporations and LLCs need a Certificate of Authority from the South Carolina Secretary of State before applying to the Board.
• Exam waivers by state. South Carolina waives its technical exam for some classifications when the qualifying party passed a matching exam in a reciprocal state, such as North Carolina, Tennessee, Louisiana, Mississippi or Utah for Building. The applicant needs an active license in good standing and a verification from their home state board. Firms that were grandfathered in or licensed by waiver in their home state don't qualify.
• NASCLA exam. The Contractor's Licensing Board accepts the NASCLA Accredited Examination for Commercial General Building Contractors. Contractors who have passed the NASCLA exam don't need to retake a separate building technical exam.
• The business and law exam is always required. Every waiver covers the technical exam only. All qualifying parties must still pass South Carolina's Business Management and Law exam for commercial contractors through PSI.
• 2% nonresident withholding. Under S.C. Code § 12-8-550, anyone who hires a nonresident contractor must withhold 2% of each payment on a contract worth more than $10,000. A contractor can avoid the withholding by registering with the Secretary of State or the Department of Revenue and giving the hiring party a signed Form I-312 affidavit. The hiring party keeps the form; it isn't sent to the Department of Revenue.
• The bond works the same way. An out-of-state firm can use the license bond instead of a financial statement. The bond must be written by a surety authorized in South Carolina. It lets a newer out-of-state firm qualify without preparing a CPA statement to South Carolina's requirements.

Public project bonds in South Carolina

The license bond doesn't take the place of bonds required on public jobs. South Carolina's public construction contracts call for separate bid, performance and payment bonds, and the license group still caps the size of job a contractor can bid.

Local governments may also set their own performance bond rules in their procurement codes. Check the bid documents for each project. For public contracts, the surety must be licensed in South Carolina and rated at least "A" by A.M. Best. Agencies can accept "B+" on contracts under $100,000 if they justify it in writing.

Circle Surety's contract bond program gives contractors an instant program approval. Bid, performance and payment bonds for individual jobs are then issued under that approval in minutes. Agents can quote the license bond and set up contract bond capacity for the same client at once.

Requirement details

Bond vs. financial statement

General contractors prove financial responsibility with a financial statement or a bond. Groups 1 and 2 can use an owner-prepared statement with an affidavit (Doc. 172). Groups 3 and 4 need a CPA-compiled statement at application, and Group 5 needs a CPA-audited statement at application and a CPA-reviewed statement at renewal. The bond replaces all of these, keeps the firm's financials private, and frees up working capital. It is often the fastest route for newer firms and for contractors moving up a group.

Bond form and signatures

The CLB only accepts the current Surety Bond for General Contractors form, written by a surety authorized to do business in South Carolina. The State of South Carolina is the obligee. The bond must be dated and signed by the principal and the surety's attorney-in-fact, with the surety's power of attorney attached.

Term and renewal

The bond is continuous and stays in force while the contractor holds the license, or until the contractor files a financial statement that meets the group's requirement. It is renewed with a continuation certificate. At each renewal, the contractor reports the surety company, bond number, bond amount, and expiration date, and attaches a new bond or continuation certificate if the Board doesn't already have one on file.

Cancellation

The bond can be cancelled only with 30 days' written notice to the Board before cancellation takes effect. The surety stays liable for anything that happened before that date. After cancellation, the contractor has 10 days to file a financial statement that meets the group's requirement, or the license is suspended until they do.

Moving up a license group

A contractor who wants to bid larger jobs must apply to the Board to move to a higher group. The firm has to meet the new group's requirements the same way a new applicant would. That means a financial statement of the type the new group requires (a CPA-compiled statement for Groups 3 and 4, or a CPA-audited statement for Group 5), or a bond for the new group's amount. Contractors who qualified with a bond can usually move up by raising the bond to the new amount, without getting a CPA statement prepared.

For example, a firm moving from Group 2 to Group 3 raises its bond from $60,000 to $150,000. The Board can also move a firm down to a lower group if it no longer meets its current group's working capital or net worth requirement. Firms licensed in Group 1 under the grandfather clause must pass any required technical exams before they can move up.

Board-required increases

If the Board finds a licensee violated the licensing law, or an applicant can't meet financial guidelines, it can require a larger bond. The increase must match the seriousness or repeated nature of the violations, or the applicant's financial condition. The Board may lower it again after one year if the violations are corrected.

Claims: what the bond covers

• Who can claim: any person or business damaged by the contractor's breach of a construction contract (or a contract for labor, materials, or professional services for construction), or by an unlawful act or omission in performing construction. The Board can also claim
• How to claim: the claimant files the Board-approved Surety Bond Claim Form with the surety company listed on the bond, along with the contract and supporting documents
• Limits: the surety's total liability is capped at the bond amount per license term, no matter how many claims are made or how many years the bond runs
• What's paid: actual damages within the terms of the bond
• Board notice: the surety must notify the Board in writing within 30 days of any payment made under the bond
• Other bonds: the license bond is in addition to any payment, performance, permit, or other bond required by law or by contract
• Your obligation: a bond isn't insurance for the contractor. If the surety pays a claim, the contractor must repay it. Agents should make this clear to clients before issuance

Sources

• S.C. Code § 40-11-260 — Financial statements and net worth requirements
• S.C. Code § 40-11-262 — Surety bond in lieu of financial statement
• SC LLR CLB Surety Bond for General Contractors (form package)
• SC LLR CLB General Contractor Application (Doc. 165)
• SC LLR CLB 2026–2028 General Contractor Renewal (Doc. 176)
• SC LLR CLB 2023 Legislative Update (Act No. 69 / H.4115)
• SC LLR CLB Surety Bond Claim Form
• SC LLR Contractor's Licensing Board FAQ
• SC LLR CLB Reciprocity / Waiver Agreements
• NASCLA Commercial Exam — Participating State Agencies
• SCDOR — Nonresident Contractor Withholding
• S.C. Code § 11-35-3030 — Bonds for state construction contracts
• S.C. Code § 29-6-250 — Payment bonds on public contracts
• S.C. Code § 57-5-1660 — SCDOT highway contract bonds