Nevada Financial Requirements, Monetary Limit & Bonds
Nevada ties a contractor's project size to its finances and requires a license bond and a recovery-fund payment. This chapter covers the monetary limit, the CPA-statement rule, working capital, the license bond, and the Residential Recovery Fund.
The financial statement and the monetary limit
The State Contractors Board sets each contractor's monetary limit - the largest single contract or project the license permits - from the financial statement the applicant files. Working capital (current assets minus current liabilities) and net worth drive the limit. When an applicant seeks a monetary limit of $1,000,000 or more, the Board requires a financial statement reviewed or audited by an independent CPA.
The license bond
Before a license issues, the applicant must post a contractor's license bond under NRS 624.270, set by the Board in proportion to the monetary limit and ranging from $1,000 to $500,000. The bond gives owners, workers, and suppliers a source of recovery if the contractor violates the licensing law.
The Residential Recovery Fund
Nevada maintains a Residential Recovery Fund (NRS 624.470 et seq.), financed by residential contractors, that reimburses eligible owners of single-family residences for actual damages caused by a licensed residential contractor's misconduct when they cannot otherwise collect. Because the fund is tied to licensed contractors, an owner who hired an unlicensed person cannot recover from it.