If you’re planning to work as a mechanical contractor in South Carolina—whether you’re brand new, relocating from another state, or renewing an existing license—it’s important to understand how the state’s licensing and bonding requirements work.
The Law That Sets the Requirements
Under South Carolina Code Section 40-11-260, mechanical contractors must meet certain financial requirements to be licensed. Normally, this means providing a financial statement showing a minimum working capital or net worth for your license group.
However, South Carolina Code Section 40-11-262 gives contractors another option: instead of submitting a financial statement, you can provide a surety bond in the same amount as the required net worth or working capital for your license group.
How to Determine Your License Group
Your license group is based on the size of the jobs you plan to bid on or perform. The higher your group number, the larger the projects you’re authorized to handle. The South Carolina Contractor’s Licensing Board reviews your application to ensure you’re in the correct group based on your intended scope of work.
Here’s how the license groups break down:
| Group Number | Bid & Job Limit | Working Capital | Net Worth / Total Equity | Surety Bond Requirement |
| Group #1 | $35,000 | $3,500 | $7,000 | $7,000 |
| Group #2 | $100,000 | $10,000 | $15,000 | $15,000 |
| Group #3 | $200,000 | $20,000 | $30,000 | $30,000 |
| Group #4 | $400,000 | $40,000 | $60,000 | $60,000 |
| Group #5 | Unlimited | $200,000 | $300,000 | $300,000 |
What the Bond Does
A South Carolina mechanical contractor surety bond is a guarantee—backed by a licensed surety company—that:
- Remains in force as long as your license is active (or until you meet the financial requirements another way)
- Lists the State of South Carolina as the obligee
- Protects clients and the public from financial loss caused by contract breaches or unlawful acts during construction work
- Is in addition to any other bonds required by law or contract
- Can only be cancelled with 30 days’ written notice to the Board.
License Term and Renewal Cycle
Licenses run on a two-year cycle, from November 1 through October 31. All mechanical contractor licenses in South Carolina expire on October 31 of odd-numbered years. Your bond must stay current for the entire license term to avoid a lapse in your ability to work legally.
Why This Matters for Contractors
For many contractors—especially those just starting out or new to South Carolina—posting a surety bond is a simpler, faster alternative to preparing a detailed financial statement. The bond also provides peace of mind to your clients and the state by showing you’re committed to meeting contractual and legal obligations.
Need a Bond? We Can Help You Get Started
Lexington National Insurance Corporation issues these bonds through our network of licensed insurance agents. If you don’t already have an agent, we can connect you with one who knows the South Carolina licensing process and can guide you through selecting the correct license group and securing your bond.