Indiana Contractor Surety Bond

The most common reason a contractor's license application gets rejected in Indianapolis isn't missing paperwork — it's a surety bond with the wrong obligee language. Each Indiana jurisdiction specifies exactly who the bond must name, and getting even one word wrong means starting over with your bonding company.

Bond Amounts Vary by Jurisdiction

Indiana has no statewide surety bond requirement for general contractors. Instead, each city and county building department sets its own bond amount and terms. Here's what the major jurisdictions require:

• Indianapolis (Marion County): $10,000 surety bond
• Evansville (Vanderburgh County): $25,000 surety bond
• Lake County municipalities (Crown Point, Schererville): $5,000 surety bond, recorded with the Lake County Recorder's Office in Crown Point
• South Bend (St. Joseph County): $5,000 surety bond valid for one year

Some smaller jurisdictions don't require a surety bond at all. Before ordering your bond, always get the current application packet from the specific building department where you plan to work.

Obligee Wording That Gets Rejected

The obligee is the entity named on the bond as the protected party. Every jurisdiction specifies its own obligee language, and building department clerks reject bonds that don't match exactly.

Indianapolis requires the bond to name the "Consolidated City of Indianapolis and/or an Unknown Third Party" as the sole obligee. Lake County municipalities require the obligee to read "Board of Commissioners of Lake County, Indiana, and all Cities, Towns, and Municipalities therein." South Bend's bond must name the "City of South Bend/St. Joseph County."

When you order your bond, give your bonding company the exact wording from the application packet. Don't paraphrase, don't abbreviate, and don't let your agent use generic language. A bond naming "City of Indianapolis" instead of "Consolidated City of Indianapolis" will be returned.

Continuous Bonds vs. Fixed-Term Bonds

Indianapolis specifically rejects continuous surety bonds. Your bond must carry a hard expiration date that matches the licensing cycle — either December 31, 2026, or December 31, 2028 (general contractor licenses in Indianapolis are issued on a biennial schedule expiring on December 31 of even-numbered years).

Other jurisdictions may accept continuous bonds, but confirm this before ordering. A continuous bond that auto-renews each year is convenient for the contractor but may not satisfy a jurisdiction that requires a fixed-term bond with a stated expiration.

What a Contractor Bond Actually Costs

Surety bond premiums are typically 1% to 3% of the bond amount for contractors with good credit. For a $10,000 Indianapolis bond, expect to pay roughly $100 to $300 per term. A $25,000 Evansville bond runs about $250 to $750.

Your premium depends on your personal credit score, the bonding company's underwriting standards, and your business history. Contractors with credit scores above 700 generally qualify for the lowest rates. Some bonding companies offer instant-issue bonds online for standard amounts.

The bond must be typed, not handwritten. Indianapolis explicitly rejects hand-written bonds.

Bond Renewal and Lapse Consequences

If your surety bond lapses before your license renewal date, your local registration and permitting privileges may be affected. Building departments can take action when required bond coverage is not maintained.

Most bonding companies send renewal notices 30 to 60 days before expiration, but the responsibility is yours. Set a calendar reminder at least 45 days before your bond's expiration date, and confirm that renewal terms haven't changed.

For a complete breakdown of bond requirements, obligee wording, and insurance minimums across Indiana's major jurisdictions, the Indiana General Contractor License Guide includes exact language you can hand directly to your bonding company.

See more Indiana guides →