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The Iowa Plumbing and Mechanical Systems Board requires all plumbers, HVAC/R, sheet metal, hydronic, and mechanical professionals to be licensed through the Iowa Division of Labor. One of the state’s licensing requirements is a surety bond in a minimum amount of $5,000.
Like other bonds, your plumbing and mechanical contractor bond acts as a legal agreement between three parties:
A bond is not insurance. While insurance protects you and your business, a bond protects your customer. In some cases, your bond may also protect the state in the event that your company violates a law.
The cost for your contractor bond will vary based on several factors, including:
You will not have to pay the full value of the bond. Instead, you must only pay a percentage of the bond amount as an annual fee. This is known as the premium.
Your premium rate is heavily dependent on the financial history of your business and your personal credit score. Based on these factors, your premium can vary from as low as 1% to as much as 15% of the bond value.
In Iowa, plumbers and contractors must post a bond in the minimum amount of $5,000. NNA Surety Bonds offers this policy with premiums starting as low as $100 based on your credit.
Get your Plumber and Mechanical Contractor Bond.
A surety bond helps to reimburse your customers if you do not complete a contracted job. In the event that you breach a contract, a claim can be made against your bond. If the claim against your bond is upheld, it will be used to pay a customer for their losses, up to the full value of the bond. Afterward, you will have to pay this amount back to the surety.
Upheld claims can make obtaining future bonds very difficult, if not impossible. This can jeopardize your license and your business. In this way, a surety bond helps promote job completion and adherence to industry regulations.
In Iowa, plumbers, HVAC techs, hydronic system servicers, and other mechanical contractors are required to obtain and post a bond before they can be licensed to take contracts. Getting bonded is one of the first steps in being licensed.
Additionally, surety bonds are often required as a means to promote project completion and lawful practices by contractors and other professionals. In the event a job is unfinished by the contractor, a claim can be made against their bond, and, if the claim is upheld, the claimant will be reimbursed for any losses up to the total amount of the bond. The contractor must then pay this amount back to the surety.
An application may be completed and submitted online or on paper to the Iowa Plumbing & Mechanical Systems Board. The general requirements for a contractor license include the following:
For more information, visit the Iowa Plumbing & Mechanical Systems Board website.
Ready to get your Iowa contractor bond? Call NNA Surety Bonds at 855-215-2160.