Insurance & Bonding Requirements for Virginia Contractors

Why this matters before you swing a hammer

In Virginia, contractor licensing lives under DPOR. That means your paperwork and your protection plan are part of doing the job right. Smart contractors treat bonding and insurance like tools. The right tool prevents delays, rejected permits, surprise costs, and worst of all, being stuck off the job.

If you are still getting ready for the license steps, bookmark these resources:

• Commercial Improvement Contractor course and support from Contractorexampreps: Virginia PSI Commercial Improvement Contractor Course
• Video walkthrough for Virginia candidates: Watch on YouTube

Bonding: when do Virginia contractors need a surety bond

Virginia uses a surety bond as an option for proving financial responsibility for Class A and Class B applicants. If you meet the net worth requirement, you can use a financial statement. If you do not meet it, you can post a surety bond instead. The bond amount is set at 50,000 dollars for Class A and Class B applicants. Class C applicants are not required to post this bond.

What the bond does

A contractor license bond protects the public and the Commonwealth if a licensed contractor violates rules tied to the license. It is not the same as insurance. If the surety pays a claim, they will expect repayment from the contractor.

How to decide between financial statement and bond

• If you easily meet net worth: A financial statement from your CPA may be simpler long term.
• If you are growing and cash is tight: The 50,000 dollar bond can get you licensed now while you build toward the net worth threshold.
• Renewals: Keep the bond active through the license term. Diarize renewal dates so your license never lapses.

Step-by-step: getting your bond and coverage set up

1. Confirm your license class and application path: If you are Class A or B and will use a bond, note that the bond amount is 50,000 dollars. If you use a financial statement instead, prep your figures early.
2. Request bond quotes: Rates depend on credit and financials. Ask for a bond term aligned to your license term so renewals are clean.
3. Shop insurance with your real operations: Describe your trades, height limits, subcontractor use, payroll, and receipts. Hidden exposures raise surprises at audit time.
4. Dial in contract requirements: Read the insurance exhibit. It spells out limits, endorsements, and proof forms like ACORD 25.
5. Keep proof handy: Save your bond, declarations pages, and certificates in a shared folder so office staff can send them with bids.

Paperwork checklist you can copy

• Active Virginia contractor license in correct class and specialty
• Proof of 8-hour pre-license education if newly licensed
• Financial statement or 50,000 dollar surety bond for Class A or B
• Workers’ compensation policy if your headcount math is more than two with subs counted
• General liability declarations and certificate of insurance with requested endorsements
• Commercial auto declarations if titled vehicles are in play
• Umbrella policy if a contract requires limits above your GL and auto
• Copies of subcontractor COIs and hold harmless language in sub agreements

Mistakes that cost time and money

1. Letting the bond lapse: Track renewal dates. A bond gap can trigger license issues and project pauses.
2. Assuming subs carry coverage: Always collect certificates. Add contract language that requires it and keeps you as additional insured when needed.
3. Ignoring permit counter norms: Some jurisdictions ask for GL for permits. If your crew is waiting in line without the right certificate, your job waits too.
4. Mismatching limits to contracts: If the contract calls for higher limits or specific endorsements, get them before mobilization to avoid change orders or demobilization threats.
5. Forgetting that bonds are not insurance: A paid claim under your bond gets billed back to you. Manage compliance to avoid that headache.

Conclusion: a simple plan to stay licensed, insured, and ready to build

Let’s bring this home. In Virginia, winning contractors treat paperwork like scaffolding. It is not glamorous, but it lets you climb higher without wobbling. Your license class sets the stage, your financial responsibility proof keeps the curtain up, and your insurance makes sure the show goes on even when something goes sideways. When you put those pieces together before you bid, everything else gets easier. Permits move faster. Clients relax. Crews get to work instead of waiting for certificates.

The big ideas are simple. First, know your lane. Class A and Class B applicants need to prove financial responsibility. If net worth is not there yet, the 50,000 dollar surety bond is the bridge that gets you across. Class C does not use this bond. Second, check your people math. If your operation regularly has more than two employees when you count part-time, seasonal, and subcontractor headcount on your trade, you need workers compensation. Many teams cross that line sooner than they expect once subcontractors are in motion. Third, carry general liability at limits that fit the size of the jobs you want. A common target for commercial work is 1,000,000 dollars per occurrence and 2,000,000 dollars aggregate, with endorsements spelled out in the contract.

From there, keep your proof tidy. Save your bond, financial statements, declarations pages, and certificates in one place that the office and the field can access. Label files with effective dates so no one has to guess. When a GC asks for a certificate with additional insured language or a waiver of subrogation, loop in your agent early and send the exact insurance exhibit. That one habit saves days on mobilization. It also keeps you off the dreaded do not start list.

If you are still working toward the license or want to lock in the business rules for test day, give yourself a structured study path. Many Virginia candidates use the Virginia Class A/B Business Online Exam Prep Course for guided practice and pair it with the NASCLA Business, Law, and Project Management guide for quick lookups. Strong prep helps you pass and also keeps you compliant when real contracts land on your desk.

Do not forget the practical add-ons that make grown-up projects smoother. Commercial auto for titled vehicles. An umbrella if your client wants higher limits. Equipment or inland marine if your tools are always on the move. Professional liability if you provide plans, design help, or construction management. Cyber if your estimates, invoices, and employee files live in the cloud. These are not extras for big companies only. They are how small teams act big when opportunity knocks.

Most of all, build a repeatable rhythm. Review requirements before you bid. Match insurance to each contract. Collect and file subcontractor certificates. Track renewal dates on a single calendar. When something changes in your operations, tell your agent and update your paperwork the same week. That steady cadence keeps jobs running and surprises small.

You got into construction to build, not to wrangle documents. The good news is that a little upfront structure frees your crew to focus on the work that pays. Know your class, meet or bond for financial responsibility, carry the right coverage, and keep proof at your fingertips. That is it. With those steps nailed down, you can chase better clients, bigger scopes, and cleaner closeouts with confidence.