Surety Bond Professionals is a family-owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your North Carolina HVAC license bond needs. Learn how to get an HVAC license in North Carolina, below.
What HVAC Licenses Are Issued in North Carolina?
The State Board of Refrigeration Contractors licenses refrigeration contractors.
The North Carolina State Board of Examiners of Plumbing, Heating, and Fire Sprinkler Contractors issues three classes of licenses for heating and cooling technicians and contractors:
- H1 is for water-based heating systems in any structure
- H2 is for forced-air heating and cooling systems over 15 tons
- H3 is for forced-air heating and cooling systems weighing less than 15 tons
You can get licensed as either a technician or a contractor in one or all three of these classes.
What Are the Steps in the Licensing Process?
It takes 4,000 hours of practical experience to obtain a contractor’s license and somewhat less for a technician’s license. Formal education (for example, community college classes and courses offered by private trade schools) can be counted toward half of those hours.
Once a candidate for licensing has passed the appropriate exam(s), in order for a statewide license to be issued, the next step is to submit a License Activation form.
Although there is no statewide bonding requirement, some municipalities, most notably Winston-Salem and Greensboro, require a surety bond as a condition for operating an HVAC business in the jurisdiction.
Why is a Local HVAC License Bond Required in North Carolina?
The North Carolina cities that require bonding of HVAC contractors do so for these reasons:
- To ensure that HVAC contractors working in the municipality operate in compliance with local ordinances and codes.
- To provide a source of funds for compensating the municipality or any consumer for a financial loss resulting from the contractor’s noncompliance with local law.
Thus, an HVAC license bond provides financial protection for the city requiring the bond (the bond’s “obligee”) and for consumers, not for the HVAC contractor (the bond’s “principal”).
How Are HVAC License Bond Claims Paid?
Every surety bond agreement is a legally binding contract. The three parties to that contract are the obligee and the principal, as already noted, plus the bonding company, known as the “surety” for short.
According to the terms of that surety bond agreement, the principal is solely responsible, by law, for paying all valid claims against the HVAC license bond. However, unless the principal pays a claim right away, the surety often covers it on behalf of the principal so that the injured party is compensated promptly. That advance payment creates a debt that the principal is legally obligated to repay to the surety. Failure to do so can result in the surety taking legal action against the principal.
How Much Does an HVAC License Bond Cost?
The required amount for locally mandated HVAC license bonds in North Carolina is in the range of $2,000 to $2,500. However, the annual bond premium is only a small percentage of that amount. That percentage (the premium rate) is set by the surety based on its assessment of the risk involved in potentially paying claims on behalf of the principal.
The best measure of that risk is the principal’s personal credit score. The higher the principal’s credit score, the lower the premium rate. A principal with good credit will most likely be assigned a premium rate in the range of 1% to 3%.
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