Licensed, Bonded, Insured?


#1

I just started my own roofing company spring of 2006. All of the roofing companies around here (NE Ohio) advertise as being licensed, bonded, and insured. We are insured, but what does it mean to be bonded and is it necessary with just 2 of us?


#2

Do you have a contractors License or just a business license. Most States require a license bond or a contractors bond be purchased as a minimum security against deadbeat contractors.
SO lets say you skip town on a job in progress. Feasibly the client could file a complaint with the state and the state could get your bonding company to pay to have the rest of the work done. Then the state would revoke your license and the bonding company will sue you for thier money back. That is how it is supposed to work. Hypothetically.

Performance bonds and Bid bonds are policies unique to specific projects and are not required by the state as a prerequsite of being licensed.

So when the contractors say they are bonded they are kind of misleading. They want to project that they are “Bondable” for performance types. But they are really only Bonded in the capacity of a license. At least that is how it started. Now I think most of them just put that in thier advertisements because thier competition does. A waste of good information space if you ask me.

It is far more difficult to get the performance bond than it is the contractors bond. They give the contractors bond to anyone for signing an affidavit and a couple hundred bucks.
The other bonds are based on your credit, capital and past experience.


#3

yes or no answers only please


#4

I guess I’m still a little confused, but I appreciate your help. I’ll look into it further.


#5

[quote=“samskii”]Do you have a contractors License or just a business license. Most States require a license bond or a contractors bond be purchased as a minimum security against deadbeat contractors.
SO lets say you skip town on a job in progress. Feasibly the client could file a complaint with the state and the state could get your bonding company to pay to have the rest of the work done. Then the state would revoke your license and the bonding company will sue you for thier money back. That is how it is supposed to work. Hypothetically.

Performance bonds and Bid bonds are policies unique to specific projects and are not required by the state as a prerequsite of being licensed.

So when the contractors say they are bonded they are kind of misleading. They want to project that they are “Bondable” for performance types. But they are really only Bonded in the capacity of a license. At least that is how it started. Now I think most of them just put that in thier advertisements because thier competition does. A waste of good information space if you ask me.

It is far more difficult to get the performance bond than it is the contractors bond. They give the contractors bond to anyone for signing an affidavit and a couple hundred bucks.
The other bonds are based on your credit, capital and past experience.[/quote]

Capital and past experience. So if you do alot of contracts with good results they are more likely to give you a performance bond?
How do they find that out. What if you worked for various companys and have finished every jod and contract out right will that matter. Because ive worked for alot of companys and have done all the jobs whitout fualt. Can I approuch a liscenser a possibly get bonded as a subcontracor. Or does this apply only to full contractors.?


#6

You can only get Bonding through a bonding insurance company. They dont care how many good jobs you have done, they will check your bank statements / balances and your credit rating. You will need to provide all of your current financials to them to review. If you are too much of a risk they will deny you bonding capacity.


#7

so it seems being bonded is only good from a advertising standpoint. It seem s like alot of work just to get that label.


#8

i am an Ohio roofing company the bonded means simply that some cities demand a bond to get licensed in their city…such as maple hts., brunswick and a lot of others it is called a completion bond…it’s just extra money you pay your insurance guy and it’s only good till the end of the year that it is purchased… it really sucked on a November job we did…but it is the cost of the business. plus the licensed stuff just means you signed up to do taxes with that city… that is why before you except a job out of your normal areas always check with the city some areas just are not worth it if you are not going to continue work in that area.
hope this helped


#9

I’ve had a $5K bond since 2002. I’m due for renewal of my license and the state of MN is making all the roofing contactors get new bonds with the effective date of April 1, 2007. My regular bond is good until August but now I have to get another one.

My first year fee was $150 and now it’s been $100 ever since.