The enticement that contractors offer, for you to hire them can be so attractive that it makes you forget your checklist items before hiring contractors. Unfortunately, your instincts do not detect fraud and other risks associated with working with rogue operatives in the construction industry. Luckily, California has laws governing the conduct of contractors. These laws protect you as a client. They put some sanity in the business. Unfortunately, they do not work automatically and you need to involve yourself in the hiring process to ensure the best outcome. You must make choices on who to hire and why. This article shall offer the insights worth following when hiring contractors. It tells you why california contractor’s license bond is important as some sort of cover against contractor liability.
What is the bond all about?
The law places a requirement for contractors to have a $25,000 surety bond posted for them to get a license. It will depend on underwriting considerations and it can go lower than this amount depending on the circumstances used to apply for a license. The credit score of the contractor also comes in handy when determining the bond amount.
A bond is different from insurance
Most people will go with contractors because they are offering insurance in case they damage things at the place of work or when there are other losses occurring because of the contractor’s fault. The presence of a liability cover in such arrangements is good, but it only covers part of the total risk that faces your relationship with the contractor and affects the quality and timeliness of the job completion. The bond servers as a ready compensation for any mistakes or damages that are directly related to the fault of the contractor. They ensure that the client does not have to go through a lengthy approval process as it is the case with insurance claims.
The highest bond does not always imply the highest compensation
The important thing to note when hiring contractors is that their bond must cover the possible damage they can cause in the job. Sometimes the risk of damage is very low, hence no need to focus much on the amount of the bond. In other cases, the states are very high and close scrutiny is important. Either way, you should also know that your claims against the bond have to go through the surety in the investigative process before the verdict comes up substantiating your claim as legitimate. Sometimes, you will only qualify for part of what you want to be compensated. These are just considerations to make when you are evaluating the bond status of the contractor.
Contractors display their commitment to their work by following the due process of getting their licenses. They also ensure that the bond papers are in order to prevent occurrences of fraud against the state and against a client. On your part, stay vigilant and only work with contractors who have a license because that is one way to safeguard the costs of the project and to guarantee that the contractor will do everything possible to minimize or mitigate all risk events pertaining to your project.