Surety bonds for your plumber license explained

Last year, the plumbing profession got an unexpected boost from New York City’s then-mayor, Michael Bloomberg. In response to a question about rising college costs, America’s eighth richest man said, “being a plumber, for the average person, probably would be a better deal than going to Harvard.”

Bloomberg isn’t the first prominent person to point out how lucrative the field of plumbing is. TIME magazine has reported that the average plumber makes $23 an hour, and that in-demand plumbers, in cities like New York, Chicago, Los Angeles, and Boston, can make up to $250,000 per year. The attractiveness of the job has made plumbing an expanding field, with the number of contractors percent between 2010 and 2020.

Anyone looking to go into the rapidly growing field of being a plumber is going to have to get a plumbing license surety bond as part of getting licensed. Like many contractors, plumbers have to go through some regulatory hoops in the process. But, to lend you a helping hand we’ve put together a quick guide to plumber license surety bonds.

What is a surety bond?

Surety bonds are mandated by different government agencies, and they exist to protect consumers. Even though a business has to get bonded, surety bonds aren’t insurance for the business. They are a form of insurance for whoever requires the bond.

No matter what the industry, bonds function the same way. There are always three parties: the obligee, the surety, and the principal. The obligee is the entity requiring the bond, which is often a state regulatory agency. The surety is the bonding company; agencies connect you to these. And the principal, that’s you— in this case is the plumbing contractor.

Surety bonds also protect the obligee in case the principal acts unethically. To the principal, they’re a form of credit. If there’s a claim, the bonding company will pay it, but they’ll look to the business owner for full reimbursement.

Why do plumbers need surety bonds?

The first thing bond plumbers need to get is a plumber license bond, which is a specific type of contractor license bond. It protects your clients in case you violate the law or fail to meet the terms of a contract (whether accidentally or not). For instance, a plumbing license bond would be used to cover a claim where a contractor did work in a customer’s home using faulty pipes.

A contractor license bond is always state-specific, and only ensures that the contractor will abide by the laws of the state in which they’re licensed. Keep in mind that other aspects of your business, such as working on a government project, might require different types of contractor bonds.

How to get bonded in your state

Since plumber license bonds are handled on both state and local levels, there are countless different licensing and bonding regimens. Each state and U.S. territory does it its own way so it is best to contact the appropriate agency directly. 

But if you want to know more, here are a few helpful examples covering some of the largest states:

• Texas - Here, there are four professional levels for plumbers, each with their own licensing requirements. While you only have to register to become an apprentice, once you move up to tradesmen, journeyman, and ultimately master plumber, you’ll need to clear a variety of exams and requirements for each step. Although in Texas, none of these levels require a bond.

• California - Things work quite a bit differently in California. Here, you don’t necessarily need a license to be a plumber, what matters is that the contractor has a license. But if you don’t plan on working under a contractor then you’ll need to get a contractor license and the corresponding contractor’s bond.

• Florida - Here, both the contractor and the plumber must be licensed. The difference is that the contractor is licensed by the state, while the plumber is licensed by the locality. Unlike in California, the plumber always needs a license even if working under a licensed contractor.

• New York - The state of New York gives full power to the municipalities, with no state level laws governing the licensing of plumbers. So, be sure to check with your locality to get all the details.

• Oregon - A high school diploma or GED is a relatively unique requirement here on top of the usual license, examination, work experience, and application fee. 

Clearly, it’s important to become familiar with your state’s particular licensing rules, as they can vary tremendously. Some requirements, such as the years of experience needed, education, and state examinations, can also require years of preparation. So, it’s vital to be aware of your state’s specific needs ahead of time.

Lorenzo Estébanez writes about surety bonds, with a focus on the process of obtaining bonds and getting licensed. He is a regular contributor for the JW Surety Bonds blog at www.jwsuretybonds.com.

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