What bonds do roofers need?
Roofers needs all types of bonds. Bonds are a guarantee that the roofing company will comply with a contract or law. It is a three party contract involving a roofer, the surety company and the obligee, the entity requiring the compliance.
License Bonds are very standard for roofers. Many cities, states, licensing boards all require roofing license bonds of different sizes. $5,000; $7,500; $10,000; $15,000; $20,000 are common bond amounts for roofers.
Performance bonds are very common on larger contracts or insurance jobs. Roofing performance bonds guarantee that a roofer if awarded the contract will perform the job. If the roofer does not perform the contract the surety company will pay up to the face value on the bond. Performance bonds for roofers are generally 1-3%.
If you are in a city and you need to pull a permit and they require a small bond to guarantee if you pull the permit you will perform the job.
If you are bidding a job and it is a large job the purchasing person may require additional reassurance that if you put together a bid and you submit it and then cannot perform the job then you lose your bid bond.
Similar to performance bonds but many include multiple parts of different bonds.
Sometimes if you have a large performance bond or job the entity you are working for may require future maintenance after the job has been completed to make sure that large complex projects were done right the first time. Most bond maintenance periods are 1 year but 2 years is also common. Adding a maintenance period to the performance contract can add 1-2% of the total cost of the project to the bond cost.