Today`s consumers are an educated group that arms itself with knowledge of what is available to them and how to get it at the best price, without compromising on quality. But another factor they consider is how to make sure they are protected in the event of a problem with their purchase. That`s why ”free shipping,” ”free returns,” and ”money-back guarantees” have become the norm in so many retail stores. But how does that mean to you, a general contractor in Florida? We`ve all heard the phrase ”Authorized, Bound, and Insured,” and you can also see it on other contractors` business cards. At Contractors Reporting Services, we specialize in licensing, renewal, and business creation, and part of the process is informing you of insurance requirements so you comply with government regulations. One of the main requirements for obtaining a contractor`s license in FLORIDA is to take out liability insurance, but it is not necessary to be bound. But just because something isn`t needed to get a license doesn`t mean it`s not worth considering, especially if you want to be protected from as many occupational risks as possible. Licensing, retention and insurance is a long and often complex process for a contractor. Getting a guarantee can be the easiest part when working with Surety Bonds Direct. We work with an extensive network of AM Best A rating guarantees to ensure that contractors can get the guarantees they need at a price they can afford. Our process is so fast and simple that Investopedia has selected us as the best guarantee company of 2021. Liability insurance pays for damages if you are held liable for bodily injury and/or property damage due to your premises and/or business. It is important to note that general liability does not apply to defective work, but only to damage resulting from defective work.
When a contractor declares that he is bound, it means that he has a guarantee, a guarantee of loyalty or both. Most state or local governments require contractor license guarantees for contractors to get their license, so let`s start with them. Knowing the differences between licensing, retention, and insurance is essential for anyone who owns, manages, works, or hires a construction company. What does bound mean and how does it differ from insurance? Does a contractor need a deposit and insurance to get a license? What kind of contractor insurance do most entrepreneurs need to have? And what other businesses as entrepreneurs need to be licensed, tied up and insured? Below, we will discuss these questions, the definitions of the three concepts and the importance of each of them for a company in today`s landscape. If the contractor says they are insured, you should ask the following questions about their coverage: Insured means that a contractor has purchased insurance products to protect against the risks associated with performing construction and maintenance work. These risks can be significant and often increase with the size and complexity of the project. Common risks include property damage, injury, and employee compensation claims. It`s important to understand the difference between engagement and assurance. For an entrepreneur, one of the biggest differences between insurance and deposit is which company bears the risk. An insurance policy transfers the risk to the insurer, while an obligation ultimately holds the risk with the capital tied up (the entrepreneur himself). Even if the person or company you want to hire seems legitimate on BBB`s website, owners should still ask them for proof that they have the necessary license, retention, and insurance.
Licensing bodies vary from state to state. In California, for example, you can visit the Contractors State License Board to see if the contractor you have in mind has an active license or ongoing bond or outstanding violations of that license. Here`s a breakdown of what it means to be insured and bound. Whether you choose to be related or not, the decision is entirely up to you, but it`s important to consider all options and be prepared for the financial impact if damage is done and a settlement is reached against you. .