It is important to have a bonded and insured roofer when looking for roofing services in a home or business. A roofer must be bonded to work on your new roof. In addition, bonded roofers must carry insurance to cover any damages caused during the roof repair or roof replacement. This blog post will discuss what a bonded roofing company does for your home or business, as well as how you can find the best roofing company near you!
What Does “Bonded” Mean?
The work of a bonded roofing company is guaranteed. A bond functions as a contract that protects any party involved in the task from financial damages. That is, if the company fails to finish the job you ordered, you will not be at risk of losing money.
The business must keep its end of the bargain with you. This must be accomplished by the provider adequately completing the roofing activities that you specified in a reasonable length of time.
Consider the bond to be a company’s total commitment to complete work for you. The bond will give you a dependable guarantee that the roofing company is concerned about your wants for completing a job correctly.
Should a Roofing Company Be Bonded?
In some states, roofing contractors need to get licensed to perform roof repairs or residential roof replacement. In addition, obtaining a roofer license bond is a common licensing requirement.
Besides a legal requirement to fulfill, bonds are also a strong sign for your customers that you are safe to do business with. Being licensed and bonded is one of your advantages on the market.
It is easier to trust a roofing company near you that is completely bonded and licensed. It must also be properly insured so that you are financially covered in the event of a problem during your roof installation. All of these factors are critical for providing you with the peace of mind you seek when hiring a team to help you take adequate care of your property.
What is a Roofing Contractor Surety Bond?
You should always look for a full-service roofing contractor bonded for your protection when hiring a skilled roofer. A bond, sometimes known as a surety bond, is a legal contract that protects one party from financial damage if the other fails to complete the agreed-upon job. As a result, if your roofing specialist fails to meet the conditions of the contract you committed to, you are protected as the property owner.
A roofing contractor needs to supply a large amount of information to the bonding business to bond. The roofer, for example, must submit a business plan, a description of the proposed work or work in progress. Also, the roofer must submit multiple financial statements proofs of credit as available with an accredited bank. And proof that the project is well-funded and that the company has a good reputation and does not mistreat subcontractors. A bond is often difficult to secure for a new company with no track record, and even if it is, the bonding capacity is generally limited.
There are some disadvantages to construction bonds. The bonding premium is typically 1-2 percent of the project cost, which the owner passes as a higher bid. However, the owner’s peace of mind and protection are frequently well worth the cost.
Bonding is far more typical because of the large cash value of the supplies and the labor costs connected with commercial and industrial roofing projects. Contract surety bonds are divided into four categories:
- Bid Bond — a financial guarantee that the bid was filed in good faith and that the contractor intends to complete the contract at a price offered.
- Consent of Surety or Agreement to bond — If the contractor is awarded the project, the Surety Consent or Agreement to Bond ensures that the required performance and payment bonds will be issued.
- Performance Bond — protects the obligee from financial damage if the contractor fails to complete the contract according to the contract’s terms and conditions.
- Labor and Material Payment Bond — This bond ensures that the contractor will pay all subcontractors, labor, and roofing materials invoices related to the project. Why do I need a bond for my roofing license?
You can’t lawfully take roofing jobs unless you first get a surety bond in each state where you plan to work. Roofing contractor bonds are required since roofing rules can be complicated and differ based on the city or county in which you work. Surety bonds can assist protect the general public while also limiting regulatory scrutiny and negligence from unqualified contractors.
Furthermore, if a roofing specialist fails to execute a contract or breaks it in any manner, the client can file a claim against the surety bond and be reimbursed for their losses. In this case, you, the roofer, must reimburse your surety business the amount of the awarded claim.
How Much Does This Contractor Bond Cost?
Some criteria determine the cost of a roofing contractor bond. Including the state regulations in which you’re seeking a license and your financial situation, including your credit score.
The quantity of the bond varies greatly between states. For example, roofing contractors in Oklahoma are only required to deposit a $5,000 bond, whereas roofing contractors in Texas must post a $100,000 bond. Roofer bonds for $10,000 to $25,000 are required in states like Minnesota and Illinois, in the center of the range.
To determine the correct bond amount for your roofing firm, check with your state’s licensing body.
How Does a Roofing Contractor Bond Work?
Roofers who have surety bonds are more likely to follow the laws and industry regulations in the states where they work. Contractors that breach these standards, engage in fraudulent practices, or cannot execute the contract job are protected by bonds.
A roofing contractor bond serves as a legal contract between three parties: the roofing contractor, the roofing contractor’s insurance company, and the roofing contractor’s insurance company.
You, the roofer, are the primary. The obligee is the entity that requires the bond, which could be a city, county, state, or federal government.
The surety is the company that is responsible for issuing your bond.
What Else Should I Know About This Bond?
Roofing contractors may be eligible for a variety of licenses in several states. And the amount of the bond may vary depending on the license.
Contractors in Manhattan, for example, can apply for either a limited or unlimited roofing license. A $10,000 bail is required for a limited license. Meanwhile, contractors with an unlimited license must post a $25,000 insurance policy.
Other states may only demand a single type of license or impose a set bond amount. So always check with your state to see their bonding requirements, or contact us right away!
How To Check if a Roofing Company is Bonded & Insured?
There are several ways to determine whether or not a roofer is insured and licensed:
- Ask and Verify
Pull a roofing contractor aside after they’ve completed an examination on your home and ask them some questions. Any reputable roofer should provide proof of licensure, even if it isn’t on hand. You may check to see if the license is active and the roofing firm is in good standing by calling the city. Second, we recommend calling and verifying their insurance carrier when you inquire about it. Similarly, confirm that they are a current policyholder and inquire about their reputation.
Several roofers in Manhattan will even provide information about their licenses and insurance carriers on their proposal/contract, which is a good indicator. Because these roofers are above reproach, it’s always a good idea to choose them.
- Check External Sources
While third-party sources will not directly tell you this, they will provide you with a good indication of their reputation. When researching roofers, we wrote an article about what sites to use as a starting point. Those with shady evaluations (especially those involving unfinished work) sign that the roofing firm isn’t bonded. (Again, when a company is bonded, the homeowner is protected against substandard work.)
Conclusion
We cannot emphasize enough the importance of doing your homework before hiring a roofing contractor. Although there are many excellent Manhattan roofers, there are still a few unskilled firms. Using your gut instinct is one of the final components of the puzzle. You generally don’t want to work with a pushy roofer, make you feel nervous, give ambiguous answers, or be inconsistent. Make sure to always choose the best roofing company near you for your roofing needs!
Do you want a no-hassle, no-fuss roof inspection? Call us at (866) 608-0284 to get one today.
