ECN Electrical Forum - Discussion Forums for Electricians, Inspectors and Related Professionals
ECN Shout Chat
Shout Box
Recent Posts
sec cable code conflict
by HotLine1. 11/19/18 02:34 PM
This anti-theist is priceless!!!
by Texas_Ranger. 11/17/18 02:15 PM
High current GFI vs regular GFCI
by Texas_Ranger. 11/17/18 02:07 PM
Single phase and what you call it.
by dsk. 11/12/18 11:10 AM
New in the Gallery:
What is this for?
Plug terminals
Who's Online Now
0 registered members (), 16 guests, and 24 spiders.
Key: Admin, Global Mod, Mod
Previous Thread
Next Thread
Print Thread
Rate Thread
Difference between bonded & insured. #6138
12/23/01 09:53 PM
12/23/01 09:53 PM
T
tdhorne  Offline OP
Member
Joined: Mar 2001
Posts: 345
Maryland, USA
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
Work Gear for Electricians and the Trades
Re: Difference between bonded & insured. #6139
12/24/01 07:47 AM
12/24/01 07:47 AM
electure  Offline

Member
Joined: Dec 2000
Posts: 4,276
Fullerton, CA USA
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]

Re: Difference between bonded & insured. #6140
12/25/01 09:10 AM
12/25/01 09:10 AM
T
tdhorne  Offline OP
Member
Joined: Mar 2001
Posts: 345
Maryland, USA
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
Re: Difference between bonded & insured. #6141
12/25/01 10:04 AM
12/25/01 10:04 AM
M
maintenanceguy  Offline
Member
Joined: Dec 2001
Posts: 300
Southern NJ, USA
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.

Re: Difference between bonded & insured. #6142
12/25/01 10:15 AM
12/25/01 10:15 AM
T
tdhorne  Offline OP
Member
Joined: Mar 2001
Posts: 345
Maryland, USA
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
Re: Difference between bonded & insured. #6143
12/25/01 03:10 PM
12/25/01 03:10 PM
M
maintenanceguy  Offline
Member
Joined: Dec 2001
Posts: 300
Southern NJ, USA
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.

Re: Difference between bonded & insured. #6144
12/25/01 10:24 PM
12/25/01 10:24 PM
N
nesparky  Offline
Member
Joined: Jun 2001
Posts: 642
omaha,ne
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

Featured:

2017 Master Electrician Exam Preparation Combos
2017 NEC Electrician
Exam Prep Combos:
Master / Journeyman

 

Member Spotlight
Admin
Admin
NY, USA
Posts: 3,524
Joined: October 2000
Show All Member Profiles 
Top Posters(30 Days)
Admin 7
Popular Topics(Views)
251,615 Are you busy
188,750 Re: Forum
178,460 Need opinion
Powered by UBB.threads™ PHP Forum Software 7.6.1
(Release build 20180101)
Page Time: 0.032s Queries: 14 (0.014s) Memory: 0.9882 MB (Peak: 1.1389 MB) Zlib enabled. Server Time: 2018-11-19 21:56:00 UTC