South Carolina Insurance & Bonding
The three construction bonds each protect a different party. This chapter covers the payment bond and how it differs from the bid and performance bonds.
The payment bond
On a project with the three standard construction bonds, the payment bond protects subcontractors and suppliers if the prime contractor fails to pay them. It gives lower-tier parties a source of recovery separate from a lien claim against the owner's property.
The bid and performance bonds
A bid bond protects the owner if a low bidder backs out, and a performance bond protects the owner by assuring the work is completed. A surety bond is a three-party guarantee, and if the surety pays a claim the contractor must reimburse it - unlike insurance, which does not seek repayment from the insured.
State-specific details
State exam facts
- State regulator
- South Carolina Contractor's Licensing Board (CLB), Department of Labor, Licensing and Regulation (LLR)
- Passing score
- 70%
- Scored questions
- 50
- Time limit
- 125 minutes
Does South Carolina require a state contractor license?
Yes. The South Carolina Contractor's Licensing Board (CLB), within LLR, licenses commercial contractors under S.C. Code Title 40, Chapter 11. A commercial license is required when the cost of the work exceeds $10,000 (after Act H.4115 of 2023).
What is on the South Carolina Business Management and Law exam?
The Business Management and Law exam is 50 questions, 125 minutes, and requires 70% to pass. Financial Groups I through V tie bid limit, working capital, net worth, and bond together (Group I $100,000 up to Group V unlimited), and applicants qualify by net worth or working capital.
What extra rules apply to South Carolina contractors?
A commercial CLB license also authorizes residential work, and a GC-Building contractor may self-perform ancillary specialty work only up to about 20% of project cost. The E-Verify requirement and the NPDES construction stormwater permit (one acre or more) also apply.
Sources: https://llr.sc.gov/clb/