ROOFING CONTRACTOR SURETY BONDS: A SIMPLE GUIDE
- INTRODUCTION
The roof is one of the most important parts of any building. Residential Roofer Bond is essential, as if a roof is not built properly, it can lead to serious problems and even safety risks. That’s why many states and local governments require roofing contractors to have a special kind of surety bond, called a roofing contractor bond or roofer license bond, before they can start working.
- WHAT IS A ROOFER LICENSE BOND?
A roofer license bond is a type of surety bond that roofing contractors must get before they begin a job. It is a promise that the roofer will follow all local and state laws during the project. This bond also ensures the contractor will finish the work on time, follow all the rules, and do the job correctly.
If the contractor fails to meet these expectations, the bond gives the client a way to get money back for any damages or losses. This bond protects the customer, not the contractor.
It’s important to know that this bond is not the same as insurance. Many states require contractors to have both insurance and a roofing bond. If a roofer works without the required bond in places where it’s mandatory, they are breaking the law.
- HOW DOES A ROOFER BOND WORK?
A roofing contractor bond involves three parties:
- Principal – The bond is purchased by the roofing contractor.
- Obligee – The government agency that requires the bond.
- Surety – The bonding company (usually an insurance company) that provides the bond.
If a homeowner or client believes the contractor didn’t do the job properly or broke the contract, they can file a claim against the bond. The surety company will then investigate the complaint. The surety will cover the damages up to the entire bond amount if the claim is legitimate. However, the contractor must later repay the bonding company. If the contractor did everything correctly, the surety will reject the claim.
- WHO NEEDS A ROOFING CONTRACTOR BOND?
This bond is required for roofing contractors in a number of U.S. states. These consist of:
- Arizona
- California
- Illinois
- Minnesota
- Oklahoma
- Texas
However, bond rules can be different from one state or city to another. If you’re not sure whether you need a roofer bond, it’s best to check with your state’s contractor license board.
- COST OF A ROOFER LICENSE BOND
The cost of the bond is only a small part of the full bond value, usually between 1% and 5%. For example, in Oklahoma, contractors need a $5,000 bond. The price range for this might be between $50 and $250. The statutory bond in Texas is $100,000, and the price may be anything from $1,000 to $5,000. Good-credit contractors typically pay less for their bond.
