asking this Q for my brother in Cali.
he’s insured and bonded as a class C contractor in Cali … (I think it’s C)
he lost a commercial account for the time being as they require bonded up to 1 Million and he’s only bonded for a coupla thousand … $10K, maybe.
Said so far he thinks it’ll cost an additional $7K for the 1 Million Bond.
anyone know of good companies, both bonding and insurance, to check out in California?
I’ve already sent him to the Erie Insurance website to see if they insure in Cali.
Thanks,
Jeff
Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Replies
Any of your typical bonding companies, Jeff. I use Amwest.
Have him check out the yellow pages and make some calls.
By the way, in California, it is the Owner/Developer that has to be bonded, not the contractor, except to the $10K required to get a license.
He should price the cost of the bond into the job, e.g., add up materials, labor, overhead and then add the cost of the bond.
Regards,
Scooter
"I may be drunk, but you're crazy, and I'll be sober tomorrow." WC Fields, "Its a Gift" 1934
"By the way, in California, it is the Owner/Developer that has to be bonded, not the contractor, except to the $10K required to get a license."He said that it was a commercial job.And unless there is a specific law against it then the purchaser can require want ever they want from from the contractor.Including, but not limited to standing on their head and singing Yankee Doodle and having a completion bond.
You are right--but the point being that the owner/developer in any improvement over $1 million must file a bond to cover 100% of the contractor bids. That is a huge undertaking, in addition to whatever construction loan he/she/it may have. If the developer has that kind of jack, then more power to him.I find that the owner/developer does not want to pay the $50K to file that kind of bond, and we often negotiate who files a bond and for how much. Public works are a different story, but this law applies to any improvement in California over $1 million, which ain't much.Regards, Scooter"I may be drunk, but you're crazy, and I'll be sober tomorrow." WC Fields, "Its a Gift" 1934
" but this law applies to any improvement in California over $1 million, which ain't much."Myabe a good start of kitchen job <G>?
As I recall, my bond company is Economy Bonds. Here is a link:
http://www.economybonds.com/index.html
BTW, I thought your brother in Calif. was a B-lic., which is a general contractor. A C-lic. is a specialty subcontractor, i.e. drywall, painting, elec, plbg. Liability ins. is usually the ball-buster in Calif. commercial contracting. Not mandated by law anymore, and getting more expensive every day.
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edited to add: I have heard of expensive completion bonds being required on larger commercial projects, basically insurance against a contractor walking out in mid-job. I think those can be purchased on a per-job basis, but not sure. I stay small, don't swim with the sharks anymore.
"he...never charged nothing for his preaching, and it was worth it, too" - Mark Twain
Edited 4/10/2006 3:10 am by Huck
maybe he is a B license? Don't know for sure ...
what ever the "big-catch all" license for a GC is ... that's him.
The work itself is actually along the lines of his day job ... contract telecom work for a national hotel chain.
I think he's bonded at $10K now ... makes sense from what you's said ... and the jump from 10K to 1 mil would be an additional $7K/year. Not sure what his $10K cost.
Do those numbers sound about right?
Not sure is location in the state matters, but he's about an hour south of LA ... thinking the work itself may be closer to LA.
Thanks.
Jeff
Buck Construction
Artistry In Carpentry
Pittsburgh Pa
An hour from LA, huh? That's about 5 miles with the traffic jams they get out there....lol.
Bob
Jeff, those numbers sound about right.Many contractors want bonded subs. They don't want to engage a flakey sub, only to find that he doesn't show up or finish the job. So typically, they require a Completion Bond. Many GC's and Banks misunderstand what a Completion Bond is, and notwithstanding the name, the Surety does not promise to complete the job. It only agrees to pay the difference in the job as between the difference in the job with and without the specific project being bonded. In essence it is a vague Payment Bond, as opposed to a Completion Bond. At least thats how they read now. Like I said, he has some leverage here. The Owner/Developer is required by law to post a bond for the entire cost of the job, which for a large commercial project, will run the Owner 2-3% in addition to the construction loan. So in a $10 million dollar project, that is $200K. Not an insignificant sum. This law in California can not be waived. Therefore, some bargaining goes on, with the sub threatening to report the Owner, and the Owner wanting a full Completion Bond, without having to post its own bond. People generally agree to keep their mouth shut and sub's bond is often waived. Have your brother see a construction lawyer for details.Regards, Scooter"I may be drunk, but you're crazy, and I'll be sober tomorrow." WC Fields, "Its a Gift" 1934
Have your brother see a construction lawyer for details.
hey ... best advice so far!
bet one trip in is less than the additional $7K buy-in too.
I'll pass along all this info ... Thanks Guys.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
The 10K bond for two years, about $200-250 for two years.
A Million Dollar job specific bond, about 1%, so say $10K, depending of previous performance.