Oregon Contractor Surety Bond

What is an Oregon contractor surety bond?

A surety bond is a three-party financial guarantee required by the Oregon CCB for all licensed contractors. The three parties are: the contractor (the principal), the homeowner or harmed party (the obligee), and the surety company (the guarantor). The bond guarantees that if the contractor fails to fulfill their obligations - abandons a project, performs defective work, or violates CCB regulations - the surety company will pay compensation up to the bond amount to the harmed party.

The bond is not insurance for the contractor. It is financial protection for the people who hire them. If the bond is paid out due to a claim, the contractor typically owes the full amount back to the surety company.

When you look up a CCB number, the bond amount and expiration date are displayed separately from the license status. A license showing as Active does not mean the bond is current - check the bond expiration date explicitly every time.

Minimum bond amounts by license type

Oregon increased minimum bond amounts effective January 1, 2024 (HB 2922). Current minimums include:

• RGC - Residential General Contractor - $25,000 minimum
• RSC - Residential Specialty Contractor - $25,000 minimum
• RLC - Residential Limited Contractor - $15,000 minimum
• CGC2 - Commercial General Contractor Level 2 - $75,000 minimum
• CGC1 - Commercial General Contractor Level 1 - $50,000 minimum
• LBPR - Lead-Based Paint Renovation - $25,000 minimum

These are minimums. Some contractors carry bonds higher than the CCB requirement. The actual bond amount for any specific contractor is shown in the CCB record when you verify their license. See CCB license types for a full list of endorsements.

What the bond does NOT cover

The surety bond is often misunderstood as a guarantee of full project value. It is not. The limits are significant:

• The bond amount is the ceiling. If your project costs $150,000 and the contractor abandons it, the bond pays a maximum of $25,000 - or whatever the bond amount is. For large projects, the bond provides partial but not full protection.
• The bond covers CCB-specific violations. A bond claim through the CCB process applies when a contractor violates Oregon construction law or CCB regulations. Disputes about design preferences or subjective quality judgments may not trigger bond recovery.
• Multiple claimants share the bond. If other homeowners have claims against the same contractor's bond, the available amount is shared. A bond that has already been partially paid out may have less available for your claim.
• Claims must be filed within one year. The CCB complaint process that leads to bond recovery has a one-year deadline from the date of substantial completion. Missing this deadline typically forfeits your right to recover from the bond.
• The bond does not cover property damage or injuries. That is what liability insurance is for. See the difference between bond and insurance below.

Bond vs. liability insurance - the difference

The bond and liability insurance serve different purposes and both must be verified separately.

The surety bond protects you against the contractor's failure to fulfill their contractual and legal obligations - abandonment, defective work, CCB violations. It is a guarantee of performance and compliance.

Liability insurance protects you against property damage and personal injuries caused by the contractor during the work. If a worker breaks a window, damages a wall, or causes an injury on your property, liability insurance covers those events. The bond does not.

Both are required by Oregon law for most license types. Both have separate expiration dates. Both must be verified when you check a contractor before hiring. See what happens when either expires.

How to file a bond claim in Oregon

If a contractor fails to complete work, performs defective work, or violates their obligations, the path to bond recovery goes through the CCB complaint process:

1. File a CCB complaint within one year of substantial completion or abandonment. Contact the Oregon CCB at 503-378-4621 or file at oregon.gov/ccb. Do not delay - the one-year deadline is strict.
2. CCB mediation. The CCB will attempt to mediate the dispute. Many disputes resolve at this stage without further action.
3. CCB determination. If mediation fails and the CCB finds a violation, they can issue an order against the contractor that includes bond recovery up to the bond amount.
4. Bond payment. The surety company pays the awarded amount. The contractor then owes this amount back to the surety.

Document everything from the start: photograph defective work, keep all written communications, save all contracts and invoices, and record dates of all events. The CCB complaint process takes time - typically several months from complaint to resolution.

For large projects - consider a performance bond

For projects where the project value significantly exceeds the contractor's CCB bond minimum, consider requiring a separate performance bond specifically for your project. A performance bond can be written for the full project value and names you as the beneficiary. Performance bonds are standard in commercial construction and available for residential projects. A contractor who refuses a reasonable performance bond request on a high-value project is not obligated to agree, but their response is a factor worth weighing when comparing bids.

Related guides

• What is a CCB number? - What the license covers and why it matters
• How to verify a contractor - Complete step-by-step guide
• Expired CCB license risks - What happens when coverage lapses
• CCB number on contracts - Legal requirements for Oregon contracts
• CCB license types - Bond amounts by license type
• How to find a CCB number - Where to look on contractor documents