Door and window contractors are being reminded to ensure their bonding and insurance coverage is adequate before beginning a job, following reports of a dispute about a building supply company’s handling of federal contracts, resulting in financial losses to sub-contractors, during rebuilding in the wake of Hurricane Katrina.
License and permit bonds are usually required for door and window installers when they apply for building permits or a contractor’s license, according to Insureon, a small-business insurance agency. “They’re a contract with an insurance company and a government agency, such as a state licensing board.
The contract says you’ll buy a bond from the insurance company, adhere to the conditions of your permit or licensing application, and follow all regulations. If you don’t, the insurance company may have to pay the state or local government the amount of the bond you purchased”.
License bonds are generally renewed annually. They may be required for a contractor to keep his or her license. A permit bond is one that’s required for a specific building permit. It guarantees that if there is a problem with the job, the insurance company may have to step in and cover any damages.
The requirements for license or permit bonds vary in cost, and by state and municipality, according to Insureon.