License And Permit Surety Bonds
As someone, who resides in Canada, you may very well know all about surety bonds. However, the majority of individuals do not. In fact, most people believe that bonds are investment products and nothing more. The truth of the matter is that surety bonds are unique and they have nothing to do with investing. This is definitely true, when it comes to license and permit bonds. Within this comprehensive guide, you’ll learn more about these bonds and their purposes.
What Are Permit And License Bonds?
Before learning more, it is best to get a grasp of the basics. What precisely are permit and license bonds? These are bonds, which govern businesses and professionals. Generally, the bond is a necessity and must be obtained, before the professional will be able to obtain their licensure. Of course, it is essential to remember that there is an abundance of different license bonds and none are identical to one another. For instance, there is a General Contractor’s bond, Plumber’s bond, and an Electrician’s bond.
The Principal’s Commitment
If you’re an electrician, who wants to obtain their license, you’ll most likely need to obtain the associated bond first. Initially, this might seem like a simplistic task, which requires very little thought. The truth of the matter is that obtaining a bond will require you to make a big commitment. Once you’ve acquired the bond, you are making a guarantee to your local province and the federal Canadian government that you’ll abide by the codes and regulations, which govern your profession. Failing to live up to your commitment could result in devastating repercussions.
Consumers are always going to be at risk of fraud, physical harm, and property damage, when they hire a public service provider. The Canadian government has taken the necessary steps to protect the consumer from these risks, by enforcing companies to post a license surety bond, before they can apply for their business license. While, it is nearly impossible for the government to monitor each and every company that operates within the Canadian borders, the surety license bond aids in making this possible.
The license and permit surety bond protects consumers, in the event that a company exhibits unlawful or negligent behavior.
What Happens If A Company Fails To Comply With The Terms Of The License Surety Bond?
While, most companies strive to provide the public with superior service, nothing can be for certain. A minor accident can turn into a major catastrophe for a licensed company or contractor, especially if the client files a claim on the surety bond. When this happens, the company is going to be at a huge risk of having their surety bond and license revoked. It is a fact, that surety companies are forced to investigate thousands of claims every year. More times than not, the surety will find in the favor of the client. The full amount of the bond will be paid out to the claimant and the principal will be forced to repay the surety.
Different Types Of License And Permit Bonds
As mentioned above, there are numerous types of license and permit bonds. Although they work in a similar fashion, they govern different professions or activities. Below, you’ll find a breakdown
of some of the different types.
- Electrician’s Bond – Electricians have an abundance of responsibilities. If they make a mistake, the client’s home could catch on fire and potentially burn to the ground! In order to prevent them from happening and to better protect the consumer, the electrician will need to acquire the bond and license, before they’ll be able to perform their service.
- Plumber’s Bond – A plumber is another individual, who will need to acquire a bond. Again, a plumbing problem could result in major damages to the client’s home. By forcing these individuals to acquire bonds and encouraging them to follow the province’s regulations, the potential for problems will be greatly decreased.
- Driveway Bond – Usually, professionals that work on driveways will be required to buy bonds. Those that intend to erect, construct, alter, or repair driveways in the country of Canada will need to get one of these bonds. The bond amount will depend on the province where you operate.
Truly, the list could go on and on. There are numerous types of license and permit bonds. Before offering your services to the public, it is a good idea to do a little research and see whether or not you need to do so.