Michigan Contractor License Bond

Michigan does not have a statewide contractor bonding requirement, but many local cities and counties do. These bonds protect the public and local authorities from financial losses caused by a contractor’s noncompliance or incomplete work. This guide explains when and where a Michigan contractor license bond is required, how much it costs, how to apply, and what options exist for contractors with bad credit. Ready to get started? You can begin your application through our online application.

Michigan’s contractor license bond rules can be confusing because requirements vary by city or trade. Some municipalities require general contractors to post a bond before receiving a building or maintenance permit, while others only require it for specialized work—like electrical, plumbing, or demolition.

Although the state doesn’t regulate bonding directly, most local building departments use it as a way to protect homeowners and ensure compliance with local building codes. The following sections explain what these bonds are, how they work, and how to stay compliant no matter where you operate in Michigan.

For an overview of similar bond types, visit our page on contractor license bonds.

A Michigan contractor license bond is a financial guarantee that protects the public and local licensing authorities if a contractor violates state or municipal regulations. It ensures that contractors follow all local building codes, pay required fees, and complete work responsibly.

Unlike contract or performance bonds (which guarantee specific project completion), license bonds are about compliance—ensuring your business operates legally and ethically.

Because Michigan doesn’t require a statewide contractor bond, each city or county sets its own rules. For instance, cities like Detroit and St. Clair Shores require licensed contractors to post a bond before pulling permits, while others such as Warren only require bonds for certain trades like demolition or sewer work.  Smaller municipalities may require bonds for specific activities like demolition, sidewalk repair, sewer installation, or security alarm contracting.

The LARA (Department of Licensing and Regulatory Affairs) oversees the state’s builder licensing process, including education and examination requirements.

However, LARA does not require a bond for state-issued builder or maintenance & alteration licenses—bonding is determined locally by each city or county.

Because there is no statewide bond amount, the cost depends on where and what type of work you perform. Most local contractor bonds in Michigan range between $1,000 and $25,000 in coverage.

You only pay a small percentage of that total—called the bond premium. Premiums generally fall between 1% and 5% of the bond amount, depending on your credit score, business history, and bond size.

For example:

• A $10,000 bond in Detroit might cost around $100 annually (1%).
• A higher-risk $25,000 bond could cost up to $500 annually (2–5%).

Other factors that affect pricing include your company’s financial standing, trade specialty, and any past claims. For instance, a sewer or demolition contractor may face slightly higher premiums than a residential remodeler because of elevated project risk.

For a deeper explanation of what influences surety rates and how premiums are calculated, see our detailed Surety Bond Cost guide.

If you’re ready to see your quote, you can apply through our online application and get a same-day estimate from multiple A-rated sureties.

Getting bonded in Michigan is a straightforward process, but you’ll want to confirm local requirements before applying. Here’s how it works:

1. Check with your local building or licensing department.
    Each municipality sets its own bond amount and filing requirements. Some cities require the bond to be on a specific form provided by the local office.
    
2. Apply through a licensed surety provider.
    Start by completing our online application to receive a fast quote. For first-time applicants, our step-by-step guide on how to get bonded explains the process clearly.
    
3. Underwriting and approval.
    The surety will review your credit history, business experience, and finances. Once approved, you’ll pay your premium and receive a signed bond document.
    
4. File your bond with the local authority.
    Submit your bond directly to the city or county that requires it—often alongside your contractor registration or building permit application.

Most local bonds remain valid for one year, though some are issued for multiple years. Renewal reminders are typically sent 30–60 days before expiration to ensure continuous compliance.

If you’re applying for a residential builder or maintenance & alteration license, you’ll also need to meet prelicensure education requirements and pass a state exam before filing your bond with LARA.

Yes. Even contractors with challenged credit histories can qualify for a Michigan contractor license bond.

At Lance Surety Bonds, underwriting focuses on the full picture—not just your credit score. We regularly help applicants secure affordable rates by reviewing business experience, trade licenses, and financial stability.

While applicants with low credit may pay a slightly higher premium (often closer to 5–8%), our flexible underwriting process helps most contractors get bonded quickly. We also offer guidance on improving your approval odds, such as keeping personal credit in good standing and maintaining proper documentation for your business.

Transparency and clear communication are central to our process—so you’ll always know your rate and bond terms before purchasing.

Is a contractor license bond required statewide or only local in Michigan?

Michigan does not require a statewide contractor license bond. Instead, bonding is managed at the city or county level. For example, Detroit and Warren require contractors to post bonds when registering locally, while other jurisdictions may require bonds only for specific trades or permit types.

Do all trades need the bond (e.g., plumbing, electrical, demolition)?

Not all trades require a bond, but many do. Residential builders, maintenance contractors, electrical and plumbing contractors, and those working in demolition, paving, or mechanical fields are commonly subject to bonding requirements. Always confirm with your local building authority before starting work.

What are the consequences of not having a required bond?

Working without a required bond can lead to license suspension, fines, or rejection of permit applications. In serious cases, contractors may also face legal action for unlicensed activity or failure to complete bonded work. A valid bond demonstrates professionalism and compliance with local regulations.

Can the bond be canceled or revoked mid-term?

Yes, but only under certain conditions. The surety can cancel a bond by providing written notice—typically 30 days in advance—to the local licensing authority. Contractors are responsible for replacing or renewing their bond immediately to avoid license interruption or suspension.

Lance Surety Bonds. (2025). Surety Bond Cost. Retrieved October 15, 2025, from
https://www.lancesuretybonds.com/learn/surety-bond-cost

Lance Surety Bonds. (2025). How to Get Bonded. Retrieved October 15, 2025, from
https://www.lancesuretybonds.com/learn/how-to-get-bonded

Lance Surety Bonds. (2025). Contractor License Bonds. Retrieved October 15, 2025, from
https://www.lancesuretybonds.com/license-bonds/contractor-license-bonds

Lance Surety Bonds. (2025). Surety Bond Quote – Online Application. Retrieved October 15, 2025, from
https://www.lancesuretybonds.com/surety-bond-quote

Michigan Department of Licensing and Regulatory Affairs (LARA). (n.d.). Residential builders.
https://www.michigan.gov/lara/bureau-list/bcc/sections/licensing-section/residential-builders

Michigan Department of Licensing and Regulatory Affairs (LARA). (n.d.). Maintenance & alteration contractor license information.
https://www.michigan.gov/lara/bureau-list/bcc/sections/licensing-section/residential-builders/lic-info/maintenance-alteration-contractor-license-information

Michigan Department of Licensing and Regulatory Affairs (LARA). (n.d.). Prelicensure education requirements.
https://www.michigan.gov/lara/bureau-list/bcc/sections/licensing-section/residential-builders/forms/prelicensure-education-requirements-for-residential-builder-and-maintenance-alteration-contractor-a