What You Should Know When It Comes To California Contractor Bonds

By Dwight Murphy

If you are going to try your hand at the construction business in California, it will take more than purchasing a ladder, a set of tools, and a pickup truck and trailer. Before you can accept a job in the public sector, you will need to obtain a license, bonds, and insurance. You must apply to the licensing board, pay the necessary fees, and submit the required paperwork. You may need more than one bond. If so, you have to know what California Contractor Bonds apply to your business.

In California, in order to do work for the public, you must first obtain a license bond. This protects your customers in the event that you do not perform the job you were hired to do. It protects customers from shoddy workmanship or work that is defective in some way.

A license bond is a way to ensure that everybody gets paid. That includes laborers working for you, subcontractors and suppliers. A qualifying individual bond can be required in cases where contractors in charge of projects have less than a ten percent interest in the company they work for.

You can get a fidelity bond to protect you and your customers from dishonest workers you have employed. A business service bond is the one that will protect your customers if one of your employees steals something or commits any other dishonest act. It keeps you from having to reimburse the customer yourself. An employee dishonesty bond protects you in case one of your workers steals from your company.

Government contracts can be very lucrative, but you probably won't be able to bid on any unless you purchase a surety bond. This bond is their insurance in case you don't adhere to what is promised by the bond. The governmental agency is the named beneficiary and can file claims.

With a surety bond, you are responsible for satisfying all claims made against you. This includes payment of legal fees incurred. You will be required to sign an indemnity agreement in order to be issued a surety bond. It states you promise to repay the surety for any expenses incurred in the course of a claim.

Your credit could be a factor when it comes to getting any kind of bond. An agency issuing a bond to a small contractor will be looking a that person's personal credit and won't issue a bond unless that credit is good. Contractors who have poor credit ratings will have trouble getting bid and performance bonds in order to work on government contracts. Large companies can get the bonds they need, but have to submit strong financial statements and have a stable history in the industry.

You can get all the information you need, and get the licensing process started. By going to the California State License Board online site. You can download the necessary forms there. The site offers study guides to help contractors pass the state examination. After you have sent in your application, you can track its status on the website.

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You can get an overview of the benefits of using Los Angeles Contractor Bonds and info about reputable California Contractor Bonds today.