Contractor Insurance & Construction Bonds

Topics: Financially Responsible Officer Bond and Construction License Bond

Artisan Insurance Inc. is our sister company owned and operated by Lindsey Klein! They specialize in insurance for Contractors like you! They sell the necessary FRO Bond that accompanies the FRO License. They also provide insurance coverages including:

• General Liability Insurance
• Worker’s Compensation Insurance
• Worker’s Compensation Exemptions
• Property Insurance
• Commercial Auto Insurance
• Surety Bonds including: Financially Responsible Officer Bonds

Who Needs Liability Insurance?

Every Contractor Applying for their Florida Contractor License needs general liability insurance!! It is essential to hire an insurance agent who understands the construction industry, class codes, and standard policy endorsements! You don’t want to be caught with improper coverage is a claim arises!

When do I need to have General Liability Insurance and Worker’s Compensation?

You sign an affidavit on your Contractor License Application stating you have general liability insurance as well as Worker’s Compensation Insurance/Exemption. This means you should have it in place prior to submitting your application! When you hire Contractor Licensing Inc. to do your licensing application, you are sure to be in business quickly so having this in place just speeds up your business production process!

Financially Responsible Officer Bonds

A Financially Responsible Officer bond is a type of surety bond required in Florida. The Florida Department of Business and Professional Regulation requires that an individual wishing to become the financially responsible officer for a construction business must provide a $100,000 surety bond. The bond must be maintained for as long as the individual holds the financially responsible officer position. FRO bonds are annually renewable. This happens when the licensing applicant does not have business ownership or financial responsibility for the qualifying company.

How Does The FRO Bond Work?

The entity that demands a bond from a state licensing agency is known as the obligee, while the principal in this case is the FRO, and the surety is the company that provides the bond. The FRO is responsible for ensuring that any fines or fees incurred by the business due to illegal or unethical financial accounting, reporting practices, or violations of fiduciary regulations are paid. If the obligee makes a claim against the bond, the surety will cover the fines or fees. However, the principal, in this case the FRO, is required to reimburse the surety for that amount.

What Do FRO Bonds Cost?

The premium for the FRO Bond is based on the credit score of the business owners as well as the financial stability of the business. The better the applicant’s credit score, the lower the premium!

Why Do I Need An FRO Bond?

Some construction companies employ licensed qualifiers who are not owners of the business and therefore do not assume financial responsibility for the business. The business owner would then apply for an FRO License and subsequent FRO Bond. This is their pledge to uphold financial compliance.