Are you bonded? - Contractor Talk - Professional Construction and Remodeling Forum

thepaintman80 · 12-22-2005, 01:43 AM

I was wondering if everyone here is bonded? I have had different people tell me different things about bonding here in Maine. Some say it is a neccesity others say no. Who are you bonded with? Any recomendations, pointers?

mdshunk · 12-22-2005, 09:22 PM

There's several kinds of bonds, each with a different purpose. I am required to have a "professional licensing bond" to keep my license active. It will pay to correct any code violations that the inspector cites in the event that I refuse to. Some bigger jobs require that you have a "performance bond", which will pay for someone else to finish the project in the event that you crap out midway, or if your installation doesn't do what it's supposed to do. I guess that there are a few other types, but I don't know.

nadonailer · 12-22-2005, 10:07 PM

In California, you have to be bonded to keep your license active. As MDshunk said, this is different than a performance bond or other types....

Tom Rohland · 12-23-2005, 05:31 AM

thepaintman80,

The fundamental responsibility of a contractor to an owner is to complete the construction project. The primary means by which contractors guarantee owners that the project will be completed is by bonding.

A contract surety bond is a three-party agreement under which a surety company assumes liability for the performance of a contractor's contractual obligations. Should the contractor default, the surety bond guarantees that work will be completed. Bonds are similar to insurance in that they offer financial reparation for specified damages.

However, surety bonds differ from insurance in that the bond does not protect the contractor. Instead, the contractor remains responsible to pay back any money spent by the surety bond company to complete a project.

In the event a contractor defaults on a contract, the surety company has the following options:

1.) Finance the contractor until obligations are met,
2.) Employ another contractor to finish the project,
3.) Allow the owner to finish the project and reimburse the owner for additional costs incurred, or
4.) Pay any outstanding debts covered by the bond.

The contractor may obtain a bond through a surety company that underwrites the contractor's account. A construction bond guarantees the owner (obligee) that the project will be successfully completed. If the prime contractor breaches or defaults on the construction contract, the surety must pay all costs incurred in completing the project - up to the amount of the bond.

(Reference - Florida 2000 Contractor's Reference Manual)

Hope this helps.

By the way, I'm not bonded. Don't need to be right now. Maybe later should I decide to take the plunge and move on to bigger and better things.

Until then I'm just an old house painter trying to make an honest living.

And loving every minute of it!

Tom Rohland, Jr.
Ranger Painting & Pressure Cleaning, Inc.

lmcgrew79 · 01-14-2006, 11:34 PM

Here in WV commercial construction requires a wage bond for the first 5 years of business. Most of the prevailing wage work requires performance bond but is most usually covered by the general contractor. Wage bond requires total monthly wages upfront example: $20 per hr. x 4 men = $12800 up front. You get it back after 5 years.

Humble Abode · 01-15-2006, 02:01 AM

Quote:

Originally Posted by Tom Rohland

thepaintman80,

The fundamental responsibility of a contractor to an owner is to complete the construction project. The primary means by which contractors guarantee owners that the project will be completed is by bonding.

A contract surety bond is a three-party agreement under which a surety company assumes liability for the performance of a contractor's contractual obligations. Should the contractor default, the surety bond guarantees that work will be completed. Bonds are similar to insurance in that they offer financial reparation for specified damages.

However, surety bonds differ from insurance in that the bond does not protect the contractor. Instead, the contractor remains responsible to pay back any money spent by the surety bond company to complete a project.

In the event a contractor defaults on a contract, the surety company has the following options:

1.) Finance the contractor until obligations are met,
2.) Employ another contractor to finish the project,
3.) Allow the owner to finish the project and reimburse the owner for additional costs incurred, or
4.) Pay any outstanding debts covered by the bond.

The contractor may obtain a bond through a surety company that underwrites the contractor's account. A construction bond guarantees the owner (obligee) that the project will be successfully completed. If the prime contractor breaches or defaults on the construction contract, the surety must pay all costs incurred in completing the project - up to the amount of the bond.

(Reference - Florida 2000 Contractor's Reference Manual)

Hope this helps.

By the way, I'm not bonded. Don't need to be right now. Maybe later should I decide to take the plunge and move on to bigger and better things.

Until then I'm just an old house painter trying to make an honest living.

And loving every minute of it!

Tom Rohland, Jr.
Ranger Painting & Pressure Cleaning, Inc.

Thanks Tom.
That's some very good info there.

Oh and I'm not bonded either. Painters are not required to be in Wisconsin.

copusbuilder · 01-17-2006, 03:06 PM

While I must have a bond to keep my electrical license I do not have to have any bonds for any other license or has anyone ever required it. I know Maine and Texas have a lot of similaritys with the thinking process.

jwbond · 01-28-2008, 03:54 PM

Quote:

Originally Posted by Tom Rohland

thepaintman80,

The fundamental responsibility of a contractor to an owner is to complete the construction project. The primary means by which contractors guarantee owners that the project will be completed is by bonding.

A contract surety bond is a three-party agreement under which a surety company assumes liability for the performance of a contractor's contractual obligations. Should the contractor default, the surety bond guarantees that work will be completed. Bonds are similar to insurance in that they offer financial reparation for specified damages.

However, surety bonds differ from insurance in that the bond does not protect the contractor. Instead, the contractor remains responsible to pay back any money spent by the surety bond company to complete a project.

In the event a contractor defaults on a contract, the surety company has the following options:

1.) Finance the contractor until obligations are met,
2.) Employ another contractor to finish the project,
3.) Allow the owner to finish the project and reimburse the owner for additional costs incurred, or
4.) Pay any outstanding debts covered by the bond.

The contractor may obtain a bond through a surety company that underwrites the contractor's account. A construction bond guarantees the owner (obligee) that the project will be successfully completed. If the prime contractor breaches or defaults on the construction contract, the surety must pay all costs incurred in completing the project - up to the amount of the bond.

(Reference - Florida 2000 Contractor's Reference Manual)

Hope this helps.

By the way, I'm not bonded. Don't need to be right now. Maybe later should I decide to take the plunge and move on to bigger and better things.

Until then I'm just an old house painter trying to make an honest living.

And loving every minute of it!

Tom Rohland, Jr.
Ranger Painting & Pressure Cleaning, Inc.

It's funny that that language came from the FL Contractor's Ref. Manual, as I can tell some of it is my writings reworded! I

Anyhow, back on topic...

Quote:

Originally Posted by nadonailer

In California, you have to be bonded to keep your license active. As MDshunk said, this is different than a performance bond or other types....

They are all in fact surety bonds. However, they have different names as they guarantee different things. A performance bond guarantees a contract where a license bond guarantees you will abide by the rules of the license.

Let me know if you have any specific questions, I am always happy to help!

threaderman · 01-28-2008, 04:01 PM

I've always called mine a surety bond.It is through LLoyds of London,very good price.Renew every 3 years.

jwbond · 01-28-2008, 04:04 PM

Quote:

Originally Posted by threaderman

I've always called mine a surety bond.It is through LLoyds of London,very good price.Renew every 3 years.

It is likely that it is a surety bond, but I can not say for sure without knowing what it is for...

Like I said above, a performance bond, a license bond...they are all surety bond types. There are literally thousands of surety bond types.

Mike Heritage · 01-29-2008, 12:50 AM

AZ. requires you to be bonded in order to be licensed. so yeppers bonded here