Hi!
After weeks of entertaining sales pitches and bids, I ended up calling the local building supply company for some references of window installers. I interviewed those that got back to me, and am about to hire one installer who has been installing windows for the past 6 years (in the 20 years prior he claims he remodeled homes). I feel comfortable with him in that he has answered my questions satisfactorily. He confirmed for me in our first call (and his bid has proven this) that he charges for the labor and materials at their cost, only.
He is a one-man show and I think his labor price is fair for this area. I am waiting to check on some references he will provide for me before I actually hire him. In the meantime, when I asked if he was licensed/bonded/insured, he confirmed that he was licensed and insured, but not bonded. To that he replied that the window install for here will be pretty straightforward, and the likelihood of a disaster happening is very low. (yes, I hear those of you who are exclaiming.."BUT, BUT, DO YOU WATCH THE NEWS???" My question: what does it really mean when someone is licensed and insured? What does it mean if they are NOT bonded??? Can possibly my concerns be allayed by the fact that we have HO insurance and an umbrella policy?
Many Thanks!
BMC
Please explain "bonded" from licensed/bonded/insur
reply
GREAT QUESTION!!!!
Licensed, bonded and insured has a very limited and specific value.
First of all... "Licensed", in almost every state, city, village, or other.. means the contractor filled out a form and their check cleared. Try it for yourself online... you will be a licensed homebuilder or remodeler by next week. NO building science or education required.
Bonded: this depends on the type of remodeling to be done but is typically a simple insurance bond that costs the contractor about 50 bucks that protects THE CITY/VILLAGE in the event that they have a cement truck show up at a job and crack a curb.... or something similar. It offers absolutely NO protection to the homeowner for job quality or completion. A performance bond or irrevocable line of credit is often asked for by government agencies for their jobs to guaranty completion but is very expensive and the costs are the responsibility of the property owner.
Insured: Everyone reading this is insured... in one way or another. Liability insurance is very cheap as it is very difficult to prove and has a low claim payout rate. Workman's comp however is very expensive which is why many don't provide it. It covers someone getting hurt on your job and taking your house. In most states, the owners of a company do NOT have to cover themselves and in smaller companies, if they are doing the work or walking the job, the homeowner will pay if they get hurt unless they purchase a separate rider on their homeowner's policy for that specific job.
Licensed... Bonded... Insured.
Not what you thought it was huh. Look for stronger sources of reference.
Licensed, bonded and insured has a very limited and specific value.
First of all... "Licensed", in almost every state, city, village, or other.. means the contractor filled out a form and their check cleared. Try it for yourself online... you will be a licensed homebuilder or remodeler by next week. NO building science or education required.
Bonded: this depends on the type of remodeling to be done but is typically a simple insurance bond that costs the contractor about 50 bucks that protects THE CITY/VILLAGE in the event that they have a cement truck show up at a job and crack a curb.... or something similar. It offers absolutely NO protection to the homeowner for job quality or completion. A performance bond or irrevocable line of credit is often asked for by government agencies for their jobs to guaranty completion but is very expensive and the costs are the responsibility of the property owner.
Insured: Everyone reading this is insured... in one way or another. Liability insurance is very cheap as it is very difficult to prove and has a low claim payout rate. Workman's comp however is very expensive which is why many don't provide it. It covers someone getting hurt on your job and taking your house. In most states, the owners of a company do NOT have to cover themselves and in smaller companies, if they are doing the work or walking the job, the homeowner will pay if they get hurt unless they purchase a separate rider on their homeowner's policy for that specific job.
Licensed... Bonded... Insured.
Not what you thought it was huh. Look for stronger sources of reference.
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Window4U (IL)
- Posts: 1374
- Joined: Fri Mar 11, 2005 3:58 pm
- Location: Sales and Installation in Chicagoland and Central Illinois
Re: reply
C'mon, FenEx let's give some states more credit than that.FenEx wrote:
First of all... "Licensed", in almost every state, city, village, or other.. means the contractor filled out a form and their check cleared. Try it for yourself online... you will be a licensed homebuilder or remodeler by next week. NO building science or education required.
Some have much stricter standards for licensing and higher education ....for example, some states like where Guy and Windoze live make you take a test. I took one there in the early 90's when the licensing law went into effect.
I was advised by a gent in the commerce department to go to a 3 hour class given by a "school" right before I took the test. So I signed up and went. During the class they teach(give) you all the answers to the test. Then, I took the test and got an easy 100%. Voila! Licensed General Contractor qualified to build anything!......cost, $400 bucks per person and the room had at least 200 students in it for the morning class.
Think there's any gov't corruption and kickbacks in that business??
Last edited by Window4U (IL) on Sat Nov 11, 2006 12:15 pm, edited 2 times in total.
Some states, such as Texas, have laws protecting homeowners against injury of contactors while working on their property. Unless it can be proven that the property owner was is some way negligent, they cannot be held liable. It is extremely difficult here to sue property owners for on-premises injuries.
Business owners here typically allow their installers to opt out of workman's compensation insurance by signing a waiver form, since Texas is a "right to work" state.
Business owners here typically allow their installers to opt out of workman's compensation insurance by signing a waiver form, since Texas is a "right to work" state.
Common W4U, 100% on the contractors license test. To many trick questions that are trying to get you to go the wrong direction. Just giving you a hard time! The test is kind of basic but it's not a breeze for those who think they can just fly past it. The course that teaches you how to pass is well worth it for two days though. You also forgot about the yearly continuing education you must take to keep your license. Ounce you pass the test the business that uses the license must provide the state with insurance and workers comp information before they'll give out the license. So we have to conform. It's really a good thing though because our yearly donations go towards a fund that is set aside to reimburse customers who get taken by any licensed contractor. So it protects people who use licensed contractors. We also have the "Right To Work" status here as Randy has in Texas. With all these guidelines set by the state, we aren't required to post bond in any city as long as our license is current and active. One other good thing is if I travel to any other state I can get a license to work in that state with out testing because MN's program is considered one of the best. It's a pain in the rear end but it's well worth it. As for insurance, most of us pay for more than we need, we have to in order to stay protected. Your state is weak there FenX!
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Window4U (IL)
- Posts: 1374
- Joined: Fri Mar 11, 2005 3:58 pm
- Location: Sales and Installation in Chicagoland and Central Illinois
Guy,
The class I took was one day, not two like they must have now. The licensing law was brand new when I took the test....at least 15 years ago. I don't remember any of the continuing education or anything else being a part of it back then....but it could just be a case of selective memory on my part.
The class I took was one day, not two like they must have now. The licensing law was brand new when I took the test....at least 15 years ago. I don't remember any of the continuing education or anything else being a part of it back then....but it could just be a case of selective memory on my part.
Reply
"Your state is weak there FenX!"
Hay'dare Guy... I don't know what yer talkin' aboat. I didn't drag MN into this specifically, it was that trouble maker Window4U.
Well, you guys might be in a right-to-work state, but many of them are right-to-sue states. As you know, I am a proponent of state and local authorities making much more stringent demands on contractors. One of the HUD sponsored groups I am part of (PATH) has been hired to write new protocols for contractors nationally. What I don't get is they are drafting the protocols on a level 1, 2 or 3 basis. The level 3 contractors being the most qualified and the only group that will be able to work with government funded programs and new energy tax incentives ahead. Level 1 pretty much requires you to own a hammer and have helped your Uncle Bob build the shed out back when you were 12.
My position is that I don't see the need for the level 1 or 2. It simply opens the door for half-assed efforts. I believe that the issues of better performing homes, higher quality housing stock, less energy waste, greater indoor air quality, reduced polution, etc. are extremely important. I think contractors should be expected to commit 100% or choose another line of work. Would anyone select a level 1 doctor, lawyer or accountant if given a choice?
Hay'dare Guy... I don't know what yer talkin' aboat. I didn't drag MN into this specifically, it was that trouble maker Window4U.
Well, you guys might be in a right-to-work state, but many of them are right-to-sue states. As you know, I am a proponent of state and local authorities making much more stringent demands on contractors. One of the HUD sponsored groups I am part of (PATH) has been hired to write new protocols for contractors nationally. What I don't get is they are drafting the protocols on a level 1, 2 or 3 basis. The level 3 contractors being the most qualified and the only group that will be able to work with government funded programs and new energy tax incentives ahead. Level 1 pretty much requires you to own a hammer and have helped your Uncle Bob build the shed out back when you were 12.
My position is that I don't see the need for the level 1 or 2. It simply opens the door for half-assed efforts. I believe that the issues of better performing homes, higher quality housing stock, less energy waste, greater indoor air quality, reduced polution, etc. are extremely important. I think contractors should be expected to commit 100% or choose another line of work. Would anyone select a level 1 doctor, lawyer or accountant if given a choice?
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