A contractor license bond is an aspect of ones work that is very essential. But, what does that mean? What can be confusing to many people can be explained in a very simple way. This is why this article will guide you through it all.
What is the purpose of a contractor license bond?
A bond like this one can be very critical especially when there are three parties involved in it. Once you have a project that needs to be done, you also need some kind of reassurance that no matter what happens everyone will be protected in the end. This is why this bond exists.
The three involving parties that we need to know about are the client, the contractor and the agency that issues these bonds. With this bond, you will be provided with the most professional services.
The purpose of this bond is to make sure that any harm or accidents that may happen in the duration of the contract will be compensated. Most states need a professional bonding company that knows the rules and laws. This will guarantee you that all is done legally. If you want to know more about these companies and what they do, follow http://www.contractorbond.org/ for more information.
The requirements needed
Before a contractor is able to make bonds, they need to obtain a license and two insurances. This wat they will be covered or compensated if needed.
But, when we are talking about compensating someone, there are few circumstances that need to be considered. First, a contractor license bond will protect the client. At the same time, the client will have some kind of expectation for the contractor to compensate them if needed.
This could happen if the contractor doesn’t do the job right, so everything will fall into their hands.
On the other hand, when we are talking about the insurance, this protects the employees. That only is the case when the employee gets an injury while still at work.
And lastly, the employer liability will protect them from suits. This can only happen when there is a work related injury.
What are the policies?
The policies we are going to talk about cover numerous instances. The instances are mostly work related injuries, during travel, natural disaster. Other times we come across violence in the workplace, fatalities or some kind of an illness or disease.
No matter what happens, the employee is always guaranteed they will get their benefits. Most of them being medical care, rehab, getting their injuries covered.
All of this means that the employee can’t sue their boss for negligence when there is a liability insurance.
The cost of a bond
When trying to pay for one bond, it all depends on what state you are in. depending on what your credit report is, the amount that you will have to pay varies.
Most times for a bond like this one, you will have to post from $15000 to $25000 surety bonds. These bonds will protect any harmed party from having a financial loss.
A contractor can use these bonds until they are cancelled. If there is no mistake made by the contractor, they can remain to work in full force.
There are some states such as Florida, Connecticut, New York, Wyoming, as well as others that don’t require you to get a license bond to be a contractor. So there will be no cost at all. This is something to think about.
Conclusion
Being a contractor means that you will have a lot of responsibilities. You might need to hire someone to follow your steps and help you through the way.
It is very important to follow the laws and to make sure that the work place will be as safe as possible. If not there will be a lot to take care of. Plus, there will be even more money involved in the process than before.
It all depends on the project a contractor will be working on. But, the safety of the employees is one to be constantly looking out for. With this kind of job, you’ll be able to up your skills and create many creative projects.
