ECN Electrical Forum - Discussion Forums for Electricians, Inspectors and Related Professionals
ECN Shout Chat
ShoutChat
Recent Posts
Violation?
by renosteinke - 01/27/23 09:52 PM
Does NEC 551.71 (F) apply to dwellings?
by BigB - 01/20/23 10:46 AM
Power submeter connections
by HotLine1 - 01/19/23 09:09 AM
AFDD's coming to the UK
by Texas_Ranger - 01/17/23 07:22 PM
New in the Gallery:
Burger King crown sillyness
Burger King crown sillyness
by wa2ise, December 11
240/208 to a house
240/208 to a house
by wa2ise, October 9
Who's Online Now
0 members (), 114 guests, and 19 robots.
Key: Admin, Global Mod, Mod
Previous Thread
Next Thread
Print Thread
Rate Thread
Joined: Mar 2001
Posts: 345
T
tdhorne Offline OP
Member
Many of you will recognize this topic from a pun in another thread. I just wanted to say that advertisements that say "Licensed, Bonded, Insured" tell a lot about the firm that is advertising and it is not all good. I have seen a few advertisements that read "Licensed, Insured, Bondable, but I guess people prefer absolutes to accuracy.
--
Tom


Tom Horne

"This alternating current stuff is just a fad. It is much too dangerous for general use" Thomas Alva Edison
Joined: Dec 2000
Posts: 4,291
Member
As a pre-condition of activating a Contractor's License in CA, one is required to post a $7500 bond, so all our contractors are actually "bonded"
They might as well throw in "Examined" or "Tested" on their ad as well. [Linked Image]

Joined: Mar 2001
Posts: 345
T
tdhorne Offline OP
Member
electure Wrote:
"As a pre-condition of activating a Contractor's License in CA, one is required to post a $7500 bond, so all our contractors are actually "bonded"
They might as well throw in "Examined" or "Tested" on their ad as well. <https://www.electrical-contractor.net/ubb/biggrin.gif>"

I imagine that is true in other places as well but is it not true that the bond you speak of is written to protect the state. I do not work in insurance but I thought bonds had to be written to protect a particular party. So the bond your insurer writes to protect the state is of no use to potential clients because the individual job you might do for them would have to be separately bonded. Help me out here. I may not be the only one who does not know.
--
Tom


Tom Horne

"This alternating current stuff is just a fad. It is much too dangerous for general use" Thomas Alva Edison
Joined: Dec 2001
Posts: 300
M
Member
Many states require all sorts of contractors to post a "bond" with the state which goes into an account the state uses to reimburse unhappy customers if they complain about you.

Joined: Mar 2001
Posts: 345
T
tdhorne Offline OP
Member
maintenanceguy Wrote:
"Many states require all sorts of contractors to post a "bond" with the state which goes into an account the state uses to reimburse unhappy customers if they complain about you."

How does that work? Do they have to post a cash bond? If you purchase a bond from an insurance carrier they only pay if you forfeit. Doesn't the complainant have to show some proof of non performance by you in order to collect?
--
Tom


Tom Horne

"This alternating current stuff is just a fad. It is much too dangerous for general use" Thomas Alva Edison
Joined: Dec 2001
Posts: 300
M
Member
you're right, it's more complicated than I said.

You have to pay $X to the state as a condition of your licensing. I guess the $X is actually yours and not the states but you never get it back. I'm a little fuzzy on that.

But The department of community affairs handles investigations and can have a hearing (although they usually just assume the complainent is right and try to nag you into settling).

The idea is that if you have to pay some sort of restitution and aren't able to, the state can step in and settle it for you but I don't think they ever let the contractor get away without paying.

I'm not in business for myself and am not an electrician so I'm not clear on the details. I did own a construction company for several years but did not build new homes so I wasn't required to participate in this program.

Joined: Jun 2001
Posts: 642
N
Member
All the bonds that I have had to post with goverment (AHJ) agencies are to guarentee that you will follow the rules. If you fail to correct something the AHJ has turned down, the city or state can have some one else fix it at either your or your bonding company's expense, up to the amount of the bond. Of course the bonding company will then come after you. Bonds are typically thru a registered state licensed bonding company-most are insurance companies.
If you do not or cannot post the bond-You will not be able to pull a permit.
If you cannot pull a permit you are not an electrical contractor as far as the AHJ is concerned.
Some jurisdictions do not require a bond- others do, you have to learn what is required where you work.
There are also bonds for other purposes, payment- performance-bid. All have specific purposes.
A bid bond guarentees that you will sign the contract for a job if you win the bid.
A performance bond garentees that you will do the job promised according to code and your contract.
A payment bond guarentees you will pay your employees, sub contractors, and suppliers for all the work and/or materials in a contract.
Owners and/or general contractors ask for or demand these bonds to cover them from anothers errors omissions and failures.
If the jobs you bid have bonding requirements, read the proposed contract and job specifications carefully. Bonds are not cheap. Most bonding companies have a lot of paperwork to get started. Depending on your company history and finances you will or will not be bondable. You will also get a bonding limit if you are bondable.
Bonds can a good thing when used correctly. Joe fly by nite will not go to a good bonding company.
I hope this helps you. If you need more info talk to a couple of construction bonding companies. Each state has it own laws that regulate bonds and bonding companies. Your state insurance comission is another place to get info. The only way to know for sure if you can be bonded is apply, do the paperwork, and ask.
Depending on your local work requirements you may or may not need to be bonded. If so remember to adjust you overhead accordanly.
If a job has bonding requirements include the cost in your estimate. Bonds are NOT cheap.


ed

Link Copied to Clipboard
Featured:

Tools for Electricians
Tools for Electricians
 

* * * * * * *
2023 National Electrical Code (NEC)
2023 NEC Now Available!
 
* * * * * * *

2020 Master Electrician Exam Preparation Combos
2020 NEC Electrician
Exam Prep Combos:
Master / Journeyman

 

Member Spotlight
waymag
waymag
dallas, texas, USA
Posts: 70
Joined: January 2002
Top Posters(30 Days)
BigB 9
triple 3
Popular Topics(Views)
302,557 Are you busy
231,908 Re: Forum
216,544 Need opinion
Powered by UBB.threads™ PHP Forum Software 7.7.5