A contract of which a surety company would promise that the listed contractor of the contractor’s license bond issued will not make any violation to go against the law of contractor license in the state where they are licensed is referred to as the contractor bond or license bond of the contractor. In California for instance, it is required that all the contractors would have a license bond. This is aside from the fact that it is required by the law. Below are some of the other reasons why ever contractor should have their contractor bond.
License can be suspended
The tabs of the contractors that maintain bonds and the ones that do not have are supervised by CSLB or California Contractors State License Board. If your bond has been cancelled, the surety company that you had the bond with should also send a notice of cancellation to be forwarded to CSLB. If the CSLB did not receive any notice to reinstate or the replacement bond was not received by the office within a 30 day period from the time they got the notice of cancellation, the contractor’s license will be eligible for cancellation.
In California, it is not allowed as it is unlawful for any person without licensed to engage in any contracting job with a project value of $500 or higher in terms of labor and materials. If a contractor is without any license, it is very unlikely for the contractor to get hired. If in case a contractor is hired without a valid license, the person may face some serious offense by the CSLB. Read more at http://ezinearticles.com/?Selecting-From-the-Many-Types-of-Surety-Bonds&id=2558428
Working with Good Surety Company
As a contractor, it is just typical to know that most construction projects do not always turn out to work like what was planned. It is even if everything went on as per the given plan. It can be caused by faulty materials, errors of humans, some weather related concerns and others. The claims against the surety company can be filed by any persons damaged by purposeful violation of the contract of the construction. If such case occurs, the surety company that you hold the license bond needs to pay the claim.
Knowing that the contractor bond is not considered as the insurance, if the claim is an accident case, there is a need to repay the surety company the amount on your behalf.
The state of California requires its contractors by the law to disclose to the homeowners if they have a valid contractor’s license bond. If there is an absence of the required bond, the homeowners or other clients have the right to choose and hire a different contractor.
Contacting a surety bond specialist can be able to assists to make sure about the size and type of bond required for a certain project. A couple of websites can be visited. One good site to visit is to click here. The site offers the best rates that you can get for a year, 2 year and 3 years bond.