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 Texas HVAC license bond needs. Learn how to get an HVAC license in Texas, below.
What HVAC Contractor Licenses Are Issued in Texas?
The Texas Department of Licensing and Regulation (TDLR) issues two classes of HVAC contractor licenses:
- Class A licenses permit an HVAC contractor to work on equipment of any size
- Class B license holders are limited in terms of the size and capacity of the equipment they can work on.
You can also add certain endorsements to your Class A or B license: environmental air conditioning, or commercial refrigeration and process cooling or heating.
What Are the Steps in the Licensing Process?
There are several ways in which you can meet the experience requirements to be eligible for licensure. Once you submit your license application to TDLR along with proof of your HVAC experience, you can take the Texas HVAC contractor license exam. A passing grade on the exam is a prerequisite for licensure. You’ll need to provide evidence of having the necessary insurance before your license will be issued.
Depending on where you plan to operate as an HVAC contractor, you may need to meet certain local licensing and bonding requirements as well.
Why is an HVAC License Bond Required?
The municipalities that require HVAC contractors to obtain a local license may also require an HVAC contractor license bond to ensure that they operate in compliance with all applicable local ordinances. An HVAC license bond protects the local licensing authority (the bond’s “obligee”) against liability for damages caused by the unlawful or unethical actions of a locally licensed HVAC contractor. It also provides a way for parties suffering a financial loss as a result of those actions a way to seek compensation.
How Are HVAC License Bond Claims Paid?
The surety bond agreement is a legally binding contract. It obligates the HVAC contractor (the bond’s “principal”) to pay any valid claim for damages caused by the principal’s violation of the terms of that agreement. However, the bonding company (the “surety”) that authorized the bond will often step in and pay the claim initially to ensure prompt satisfaction of the claim. That payment on behalf of the principal creates a debt owed by the principal, who is legally obligated to repay 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 bond amount is established by the bond’s obligee, and the annual bond premium is a small percentage of that amount. The surety decides what that percentage, the premium rate, will be based on the degree of risk involved if it becomes necessary to pay claims on the principal’s behalf. The primary factor entering into that decision is the principal’s personal credit score. There is an inverse relationship between the principal’s credit score and the premium rate set by the surety—the higher the credit score, the lower the premium rate, and vice versa.
A principal with good personal credit typically will pay a premium rate in the standard market rate range of 1% to 3%.
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