Insurance and Bonds
Did you know that ALL contractor licensing applicants in the State of Florida must show evidence of General Liability Insurance?
Am I Required to have General Liability Insurance and Worker’s Compensation?
All contractor licensing applicants in the State of Florida must show evidence of General Liability Insurance. This protects your business in case someone other than an employee is injured as a result of your work as well as covering expenses if your company is held responsible for damaging someone else’s property. Your General Liability insurance policy would help cover expenses for any legal claims against your company due to any injuries or damages to property, up to your policy limits.
If you have employees, you are required to have Workers’ Compensation Insurance to help cover any medical expenses, lost wages, and employer liability in case of any on-the-job illness, injury, or death.
Our friends at Insurance By Rob specialize in insurance for Contractors! They sell the necessary insurance as well as the FRO Bond that is required with your licensing application to the State of Florida. They are ready to give you a FREE, Same Day quote when needed and will provide you with options from several different carriers – always better to have choices.
Some of the insurance coverages they offer include:
- General Liability Insurance
- Business Owner Insurance
- Worker’s Compensation Insurance
- Worker’s Compensation Exemptions
- Property Insurance
- Commercial Auto Insurance
- Surety Bonds including Financially Responsible Officer Bonds
What is FRO or Financially Responsible Officer Bond?
A Financially Responsible Officer (FRO) is often the owner– or another officer– who’s the primary person in charge of the financial responsibility of a contractor’s company.
The purpose of the bond is to ensure that officers carrying the financial responsibility of a company will follow and abide by all applicable laws. It protects the licensing bodies and the general public from non-payment of any due fees and costs, and guarantees that the FRO will provide all needed paperwork to relevant authorities.
The FRO Bond is a three-party contract. The principal is the financial responsibility officer. The obligee is the State authority that provides the licensing and requires the bond. The surety provides the bond and the financial backing.
To see a copy of the application for your Financially Responsible Officer from the DPBR and the Florida Construction Industry Licensing Board, visit here.
How Does The FRO Bond Work?
One of the most important requirements of your contractor licensing application in Florida is obtaining a FRO Bond. It works as a safety mechanism that protects the State and your customers and ensures your legal compliance. Typically, the amount of the Florida financially responsible officer bond that you have to post is $100,000. You have to provide it on the official form and pay a bond premium, which is a fraction of the required bond amount. The usually depends upon the strength of your personal and business finances. The most important indicators that shape the price include your credit score, as well as other financial factors such as fixed and liquid assets. The stronger these factors are, the lower the premium you can get.
What Do FRO Bonds Cost?
The cost of a FRO Bond is typically based upon the financial stability of the business and the credit score of the business owners. If you are able to improve your credit score prior to your application, you would likely save $$ on your premium.