District of Columbia Refrigeration and Air Conditioning Contractor Bond: A Comprehensive Guide
This guide provides information for insurance agents to help contractors on District of Columbia (Washington D.C) Refrigeration and Air Conditioning Contractor bond
At a Glance:
- Average Cost: $175 for the required two-year period or $9 per month
- Bond Amount: $5,000
- Who Needs It: All refrigeration and air conditioning contractors operating in the District of Columbia
- Purpose: To ensure the public will receive compensation for any damages should the refrigeration and air conditioning contractor fail to comply with permit law
- Who Regulates Refrigeration and Air Conditioning Contractors in the District of Columbia: The District of Columbia Department of Consumer and Regulatory Affairs (DCRA)
***This page focuses exclusively on the bond and permit requirements for the Refrigeration and Air Conditioning Contractor Bond. For information on the Master Refrigeration and Air Conditioning Mechanic Bond and License, view our Master Refrigeration and Air Conditioning Mechanic Bond page.***
Background
Code of the District of Columbia 14-511.1 requires all refrigeration and air conditioning contractors operating in the District to obtain a mechanical permit with the DCRA. The District of Columbia legislature enacted permit laws and regulations to ensure that contractors engage in ethical business practices.
In order to provide financial security for the enforcement of the permit law, refrigeration and air conditioning contractors (“HVACR contractors”) must purchase and maintain a $5,000 refrigeration and air conditioning contractor surety bond to be eligible for a permit. The bond must expire on September 30th of each even year (2020, 2022, 2024, etc).
What is the Purpose of the District of Columbia HVACR Contractor Bond?
The District of Columbia requires refrigeration and air conditioning contractors to purchase the Refrigeration and Air Conditioning Contractor Bond as part of the application process for a mechanical permit. The bond ensures that the public will receive compensation for financial harm if the contractor fails to comply with the permit regulations. In short, the bond is a type of insurance that protects the public if the contractor breaks permit laws.
How Can an Insurance Agent Obtain a District of Columbia HVACR Contractor Surety Bond?
BondExchange makes obtaining a Washington D.C. Refrigeration and Air Conditioning 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? Gain access 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.
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Is a Credit Check Required for the District of Columbia Refrigeration and Air Conditioning Contractor Bond?
Credit checks are not required for the DC Refrigeration and Air Conditioning Contractor bond.
How Much Does the D.C. Refrigeration and Air Conditioning Contractor Bond Cost?
The $5,000 DC Refrigeration and Air Conditioning Contractor surety bond costs just $175 for the required two-year period or $9 per month.
How Does the District of Columbia Define “Refrigeration and Air Conditioning Contractor”?
The District of Columbia differentiates between a refrigeration and air conditioning contractor and a master refrigeration and air conditioning mechanic. The contractor is the actual business entity that employs licensed mechanics. Each refrigeration and air conditioning contractor must employ at least one licensed master refrigeration and air conditioning mechanic. The contracting company will need to obtain a mechanical permit for each project with the DCRA to conduct business operations.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How Do Refrigeration and Air Conditioning Contractors Apply for a Permit in Washington D.C.?
Contractors in D.C. must navigate several steps to secure a mechanical permit. Below are the general guidelines, but refrigeration and air conditioning contractors should refer to the permitting statute for details on the process.
Step 1 – Obtain a Business License
All businesses operating in the District of Columbia must obtain a Basic Business License. Contractors can apply for a basic business license here.
Step 2 – Obtain a Master License
Refrigeration and Air Conditioning contractor companies must employ at least one licensed master refrigeration and air conditioning mechanic to be eligible for a mechanical permit. Contractors can view our Master Refrigeration and Air Conditioning Bond page for details on the licensing process.
Step 3 – Purchase a Surety Bond
Refrigeration and air conditioning contractors must purchase and maintain a $5,000 Refrigeration and Air Conditioning Contractor surety bond. Each master refrigeration and air conditioning mechanic employed by the company must also purchase and maintain a $5,000 Master Refrigeration and Air Conditioning bond.
The bond must expire on September 30th of each even-numbered year (2020, 2022, etc).
Step 4 – Complete the Permit Application
The DC mechanical permit application can be completed online through the DCRA’s permit portal. The permit application process is pretty straightforward, contractors should make sure that their application is submitted by a licensed master refrigeration and air conditioning mechanic in their employ.
Step 5 – Pay Fees
Contractors will need to pay a permit fee specific to the mechanical work performed. Contractors can find a list of all DC permit fees here.
How Do DC Refrigeration and Air Conditioning Contractors File Their Bond With The DCRA?
Refrigeration and Air Conditioning contractors should scan the completed bond form and submit it online through the DCRA’s licensing portal. The refrigeration and air conditioning contractor 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:
- The legal name of entity/individual(s) buying the bond
- Surety company’s name
- Bond amount
- Date the bond is signed
- Date the bond goes into effect
- Bond type (master mechanic or contractor)
- Date the bond expires
- Two witness signatures for the licensee
How Can DC Refrigeration and Air Conditioning Contractors Avoid Bond Claims?
To avoid claims on the Refrigeration and Air Conditioning Contractor Bond, contractors must follow all license and permit regulations in the state, including some of the most important issues below that, tend to cause claims:
- Do not engage, or allow representatives of the business to engage, in any acts of fraud\
- Repair all property damage caused through the course of work
What Other Insurance Products Can Agents Offer HCACR Contractors in Washington DC?
DC does not require master HVACR mechanics to obtain any form of liability insurance. However, most reputable contractors will seek to obtain liability insurance anyway. Bonds are our only business at BondExchange, so we do not issue any form of 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 DC Refrigeration and Air Conditioning Contractors?
The District of Columbia conveniently provides a public database to search for active refrigeration and air conditioning contractors in the state. The database can be accessed here. Contact BondExchange for additional marketing resources.
What other Contractor License Bonds are Required in Washington DC?
Contractors in DC will need to obtain specific bonds correlating with their license type. Below are all the different contractor licensing bonds required by the District of Columbia: