Licensed, Bonded and Insured
We hear horror stories all the time about people that had money stolen from them by a contractor or didn’t complete the job and are never heard from again. This blog is written in the hopes that anyone that reads it will be aware of the financial dangers associated with contractors. Sometimes contractors just get very busy and drop the ball on the project, and sometimes it seems it was their plan from the start to take advantage of people. So, for starters, we will explain the difference between licensing, bonding, and insurance for contractors.
There are two different types of licenses that a HVAC contractor should have. The first one is the business license. This is the first step to legitimizing the business. All contractor businesses are required to have a business license to operate in their state of operation. This is the license they need to operate and be considered a business entity. It is a simple process that can be completed in less than an hour or two most of the time. Usually, this license is cheap, less than 50 dollars to get started. In our county, it is 15.00 to get started. Some contractors will say they are licensed because they have this license to operate. It is important for you to know that this license requires no experience or testing in most cases. If you are concerned that your prospective contractor may not have the skills, knowledge, or proper tools and equipment to complete your project, you should be clear in asking the contractor if they have a Mechanical Contractor’s License or just a business license to operate. If they only have a business license, it doesn’t mean that they are unable to do work on the project, it just means that they haven’t tested and proven that their proficiency is up to par.
We recommend going with a contractor that has a Mechanical Contractor’s License, simply for peace of mind. So long as your project dollar amount is equal to or less than the limit on the contractor’s Mechanical Contractor License, that contractor should be able to satisfy the requirements for the project as well as have the resources available to complete the job. Part of the process for this licensure includes verifying how large of projects the company has handled in the past, how much funding the company has available, and what assets (tools and equipment) the company owns to work with. Obviously, a one-man operation with one truck and one set of hand tools will not be able to accomplish what a company can do in the same amount of time that has full crews all set up with the proper tools, equipment, and training. These licenses are public records and can be looked up without even discussing it with the contractor, but you should also be able to request the license number and limit, or a copy of the license may be displayed to you. Make sure that it is in date and has no current judgments on it if you are worried about the company still. The odds of having a major issue with a licensed contractor are drastically lower than with a contractor that is not fully licensed.
It is important to note that conducting business the right way and taking care of any issues that arise on a project comes with a cost. Because those contractors are paying for training, and good vehicles, maintenance, and have the labor force available to provide prompt, good quality service, their costs will be higher than a one-man operation. This is one of those situations that reflect the adage, “you get what you pay for”. Bigger contractors have supplemental staff in place to offer prompt phone answering service, dispatch systems to ensure technician’s schedules are handled appropriately, and other staff to handle paperwork such as unit registrations and warranty claims. This is one reason why sometimes you see such drastic differences in prices. Not to say that there aren’t companies out there that take advantage of this. Most often, legitimate companies cost more because they pay more to get your service taken care of. Comfort Masters A/C spends thousands per year on training to ensure that every person that they encounter has a positive experience, and we are all able to solve whatever issues are going on. It is also important to note that the technicians that are great at what they do deserve to earn a comparable living. If you want the best of the best, it costs more per hour. This is especially true in the case that the contractor offers an after-hours option because those hard-working men and women are sacrificing their family time to serve their prospective customers. Keep in mind that that company is likely also paying someone to answer those phone calls as well, and those hard-working people also need to be compensated for their time.
Bonding is separate from Insurance because it is there to cover if the contractor drops the ball. When a company is bonded, it has a special kind of insurance to cover issues with customer satisfaction. A bond guarantees the work to be performed and that it will be performed and completed up to spec. If a bonded contractor fails to complete a job or fails to follow the agreed-upon blueprints or for whatever reason fails to complete the job, at the fault of the contractor, the bond will allow a different contractor to come in and complete the work as it was supposed to be completed. It’s a safety net for you, the customer, that the project will be completed no matter what.
In summary, to avoid costly mistakes, receive good quality experience, get your system back up and running as quickly as possible, vet your contractors and make sure they are truly licensed, bonded, and insured! Don’t be that customer that went with the cheapest bidder and lose half of the money for the project, paying upfront for services that will never be received.