Financially Responsible Officer Bond

What is a Financially Responsible Officer Bond?

A financially responsible officer bond is a surety bond required for an individual wishing to become the financially responsible officer for a construction business in the state of Florida. This bond must be maintained for as long as the individual holds the financially responsible officer position

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Who needs a Financially Responsible Officer Bond

A Financially Responsible Officer appointed by a construction company need to have a financially responsible officer bond. Typically. this person is appointed by the construction company because he or she is the only person with the experience necessary to perform the construction work as specified by the license type. This financially responsible officer does not have an ownership interest in the construction company.

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Why do I need a Financially Responsible Officer bond?

Because a financially responsible officer bond achieve two goals

Filter out disqualified individuals from becoming a financially responsible officer (i.e., those with low credit scores for whom the surety company will not issue a bond)
Provide a financial guarantee that a financially responsible officer and the construction company he or she represents will meet legal labor laws and other related employer obligations

How does a Financially Responsible Officer bond work?

A financially responsible officer bond is a legal contract binding three parties together.

The principal is the financially responsible officer
The obligee is the state government agency who requires the bond
The surety is the insurance company who issues the bond.

If a financially responsible officer or the construction company conducts fraudulent activities (i.e., lying to customers, not completing a construction task), the obligee can seek reimbursement by filing a claim against the financial responsible officer bond. If a claim is prove to be valid, the surety will pay for the claim up to the bond amount. Then, the surety will require reimbursement from the financially responsible officer

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How much does a financially responsible officer bond cost?

The cost of a financially responsible officer bond varies, depending on the bond amount and credit score. The higher the bond amount, the more expensive your bond and the lower your credit score, the more expensive the bond. Generally, a financially responsible officer bond starts at $1,000