Importance Of Licensing, Bonding, And Insurance For Contractors and Homeowners

If you sign a contract with a contractor who is not licensed, you are not going to break a law, but you are going to take a big risk. At times, shoddy workmanship may cause a good deal of loss. Therefore, many states in the USA spend a considerable amount of resources in order to catch and punish unlicensed contractors. Read on to find out more.

There are entities offering counsel to licensed as well as unlicensed contractors that face fines and legal charges in relation to license violations. Moreover, they point out why the DBPR and CILB consider surety bonds, licensing and insurance a very important aspect of the industry of construction on the whole.

LICENSING

The contractor’s licenses are under the regulation of the DBPR and CILB in order to make sure that each individual that gets certificate meets the set requirements, such as financial responsibility, experience in the field, clean criminal record, and insurance coverage based on the type of license.

Aside from this, it’s important to keep in mind that licensed pros can be held responsible if they don’t complete the work or complaints have been registered against them. Therefore, the pros try their level best to complete the work in time in order to avoid permanent license revocation. So, for each professional, it’s very important to meet the deadlines.

SURETY BONDS

In each construction contract, it’s mentioned that the project will be completed within the given time. If the deadline is not met, problems can occur for the contractor. This is where a surety bond comes to rescue the homeowners. In unforeseen circumstances, a bonded status offers protection to business owners, but it’s not required if you are based in Florida. However, it does matter if the credit score of the contractor is under 660.

With a surety bond, homeowners have the peace of mind that the project will be done. But if the contractor fails, it will be the responsibility of the surety company to look for another person to do the job. Alternatively, the company may compensate the homeowner for the losses that may have occurred.

INSURANCE

It’s understood that accidents may happen. An employee may get injured or the property may get damaged. No matter what happens, you may have to suffer the loss. But you can avoid paying the bill in case of an accident. Your state may guarantee the protection of workers as well as general public. So, if you want to get a contractor’s license, you have no choice but to maintain property damage, liability, compensation insurance of the workers. Even licensed pros may get in trouble. For instance, if the DBPR carries out a site inspection, the pro may have to pay big fines if they don’t have an insurance policy.