What is a County, Code Compliance or Permit Bond?
A Code Compliance Bond (etc.) is essentially a bond that provides the county or municipality with financial collateral should a contractor fail to meet the county’s minimum standards forcing the county to step in a repair, rework, or litigate some aspect of the contractors job. In reality two things happen here:
- The bond amount is usually so low that the county or municipality spends more money trying to collect the funds than the face value of the bond is for.
- Very few of the bonds ever have a claim filed against them, probably as a result of #1 above.
Hillsborough County requires a “Continuous” $5,000 Code Compliance Bond. If you have a Bond currently on file with you must furnish a “Bond Continuation” or other documentation from either the Insurance Agency or the Surety Company indicating the bond premium date paid through. This must be furnished regardless of the fact that the Bond is continuous until cancelled.
- Bonds are required of all ACTIVE Contractors
- A Power of Attorney from insurance company must be attached to all new bonds
- Bond and License must read the same (ex. John Doe, Individual or John Doe/Doe Construction)
Make sure you provide a copy of your license to us so that your bond reads exactly the same. Otherwise the municipality may reject it!
How Much Do They Cost
1 Year Term
$1005000 $ Bond
2 Year Term
$175Business Financial Statements
(Balance sheet, income statement, statement of cash flows and aging schedule for account receivables and account payables) are classified into 4 categories, in order of preference by the surety. Because FRO bonds are only $100,000 in penal sum, most sureties will accept any form of business financial statements for the commercial bond submission.
- Audited Statements:
An audit verifies relevant items in the financial statement with internal and external investigations of their accuracy. The accountant certifies that the financial statement is presented in accordance with generally accepted accounting principles. - Reviewed Statements:
A review statement, which does not require the outside verification present in an audit, consists principally of a thorough review of the contractor’s financial records and the application of certain analytical procedures to the financial data. Although narrower in scope than a full audit, the review does provide some limited assurance about the financial statements.
(Balance sheet, income statement, statement of cash flows and aging schedule for account receivables and account payables) are classified into 4 categories, in order of preference by the surety.