Kentucky Roofing Contractor Bond: A Comprehensive Guide
February 10, 2021
This guide provides information for insurance agents to help contractors on Kentucky Roofing Contractor bonds
At a Glance:
- Average Cost: Between $150 – $750 per year based on the contractor’s credit
- Bond Amount: $10,000
- Who Needs It: All individuals and business entities seeking to obtain a seeking to obtain a certification from the Kentucky Roofing Contractors Association
- Purpose: To ensure the public will receive compensation for any damages should the contractor fail to comply with contractor licensing law
- Who Regulates Roofing Contractors in Kentucky: While there is no licensing authority, The Kentucky Roofing Contractors Association (KRCA) offers non-governmental certifications
Background
Kentucky does not have a licensing requirement for roofing contractors, and there is no government agency who ensures contractors engage in ethical business practices. However, the Kentucky Roofing Contractors Association is a trade agency who offers membership to reputable roofing contractors, manufacturers and suppliers. Contractors join this association to build consumer confidence in their services and to add an extra layer of legitimacy to their business. In order to qualify for membership in the KRCA, contractors must purchase and maintain a $10,000 roofing contractor surety bond.
What is the Purpose of the Kentucky Roofing Contractor Bond?
The Kentucky Roofing Contractors Association requires contractors to purchase the Roofing Contractor Bond as a prerequisite to registering with their trade organization. The bond ensures that the consumers will receive compensation for financial harm if the contractor fails to abide by the terms of the contract. In short, the bond is a type of insurance that protects the public if the roofing contractor does not provide the agreed upon services.
How Can an Insurance Agent Obtain a Kentucky Roofing Contractor Surety Bond?
BondExchange makes obtaining a Kentucky Roofing Contractor Bond easy. Simply login to your account and use our keyword search to find the “contractor” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
Is a Credit Check Required for the Kentucky Roofing Contractor Bond?
Surety companies will run a credit check on the owners of the contracting company to determine eligibility and pricing for the Kentucky Roofing Contractor bond. Contractors with excellent credit and work experience can expect to receive the best rates. Contractors with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the contractors credit.
How Much Does the Kentucky Roofing Contractor Bond Cost?
The Kentucky Roofing Contractor surety bond can cost anywhere between X to X per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. We also offer easy interest-free financing for premiums over $500. The chart below offers a quick reference for the approximate bond cost on the $10,000 bond requirement.
| Credit Score | Bond Cost (1 year) |
|---|---|
| 800+ | $150 |
| 650 – 799 | $200 |
| 600 – 649 | $400 |
| 550 – 599 | $750 |
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
How Do Roofing Contractors Become Certified With The KRCA?
Because there is no licensing authority for roofing contractors in Kentucky, the KRCA developed a contractor certification program more than 10 years ago to build consumer confidence in the industry. Roofing contractors in Kentucky must navigate several steps to become certified with the KRCA. Below are the general guidelines, but contractors should refer to the KRCA application form for details on the process.
License Period – The Kentucky Roofing Contractor Certification is valid for one year and must be renewed annually
Step 1 – Purchase a Surety Bond
Contractors must purchase and maintain a $10,000 roofing contractor surety bond
Step 2 – Purchase Insurance
Contractors are required to purchase liability insurance with a minimum limit of $1 million
Step 3 – Sign the Code of Ethics
Contractors must sign a Code of Ethics Statement agreeing to adhere to the standards set forth therein
Step 4 – Complete the Application
Contractors can complete the certification application online here.
Step 5 – Pay Fees
Contractors must pay the following membership fees based on their annual generated revenues:
-
- Less than a million: $375
- 1-3 million: $475
- Over 3 million: $575
How Does a Kentucky Roofing Contractor Renew Their Certification?
Contractors can renew their certification online here. The Kentucky Roofing Contractor Certification is valid for one year and must be renewed annually
What Are the Insurance Requirements for the Kentucky Roofing Contractor Certification?
The KRCA requires roofing contractors to obtain liability insurance with a minimum limit of $1 million. Additionally, contractors with employees must purchase unemployment insurance. Contractors must purchase and maintain a $10,000 roofing contractor surety bond.
How Do Kentucky Roofing Contractors File Their Bond With The KRCA?
Contractors may file their bond electronically through the KRCA’s application portal The roofing contractor surety bond requires signatures from both the surety company that issues the bond and the contractor. The surety company should include the following information on the bond form:
- Legal name of entity/individual(s) buying the bond
- Surety company’s name
- Date the bond is signed
- Date the contractor’s commission expires
What Can Contractors Do to Avoid Claims Against the Kentucky Roofing Contractor Bond?
To avoid claims on the Roofing Contractor Bond, contractors must abide by all contractual agreements and ensure that their customers receive the job they were promised.
What Other Insurance Products Can Agents Offer Roofing Contractors in Kentucky?
The KRCA requires roofing contractors to obtain liability insurance. In addition, contractors with employees will have to purchase unemployment insurance. Bonds are our only business at BondExchange, so we do not issue liability or unemployment insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Kentucky Roofing Contractor Customers?
The KRCA conveniently provides a public database to search for certified contractors in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
