A Sign Builder bond is designed to protect the state against poor workmanship when hiring a contractor to build or repair a sign. In some municipalities, it is required in order to receive permission to build or repair a sign. The bond ensures that the contractor will abide by all local ordinances. If a contractor fails to execute his or her duties as agreed, they are liable to pay restitution. These bonds are valid for one year, and premiums vary according to the bond amount and the specific project in question. Contractors who are backed by a bond are preferable to many municipalities.