How to become an HVAC construction contractor
As with running any small business, being a HVAC market contractor can be a rewarding endeavor. With the right know-how and a successful marketing strategy, you can reap the benefits of being independent and earn a steady income.
Of course, before you get to that point, you need to lay the legal groundwork for your business and the first step is getting a HVAC construction license. People often find that part a little confusing and requirements vary from state to state, but your action will always follow the same pattern. So to make your life easier, here is a quick guide on what to look for regardless of which state you’re in.
Contact the contractors’ license board in your state
The profession of HVAC sales contractors is heavily regulated, so there is usually a statewide license board which handles business registrations and licenses. Some states, however, have delegated this task to various other departments — such as revenue or the consumer affairs — so your first task is to find which the regulatory body in your state is.
Most institutions now contain comprehensive information on their websites and all of the application forms you need to fill will be available online.
Get a good HVAC market education
Many states will require you to attend some form of formal education to acquire the skills required to be a HVAC construction contractor. These are often offered at community colleges or through other formal training institutions.
Other states may also want you to become part of an apprenticeship program, often provided by unions, where you can get a more hands-on experience in the trade. As a final step you will often be required to take a licensing exam where you have to demonstrate you knowledge of HVAC market systems’ installation, maintenance and repair. Keep in mind that if you want to work in refrigeration, that often requires another exam.
Look for the best insurance coverage
Applications for getting a HVAC construction license will usually require you to show proof of insurance by listing your policy number and submitting a copy of the insurance. Most commonly, this will be liability insurance of a certain amount per accident.
Having liability insurance is important because it covers you in case of a workplace accident, but it also serves as a workers’ compensation in case any of your workers suffers one. Be sure to compare different options before you buy insurance, as prices can vary. Each company is interested in different aspects of your business before they give you a quote, though typically they will look into your experience, the size of your business and whether you’ve had previous accidents.
Inform yourself about your contractor license bond
A very important step on your way to getting a HVAC license is the contractor license bond, which is required by most states, though its amount varies. A contractor license bond is required from all contractors before they can get licensed. In contrast with liability insurance, it’s actually a protection for the public and your clients.
It’s very important to understand the specifics of a contractor license bond. It’s underwritten by surety bonds companies which guarantee the state that you are trustworthy and will abide by the rules. If you break the rules you can get a claimed, which means you will be sued for the total amount of the bond. This is why you need to be well-acquainted with HVAC market rules and regulations in your state.
Otherwise, you never have to pay the full amount. Instead, contractor license bonds are paid in annual premiums and your particular price depends on factors such as your personal credit score, financial statements and years of experience.
A good rule of thumb is that for people with clean credit history, the premiums vary between 1 and 3 percent of the total bond amount required. People with bad credit score are high-risk applicants, so their quotes are in the range of 5 percent to 15 percent.
Comply with other public regulations
Even though HVAC construction licenses are usually valid state-wide, very often cities or municipalities may have certain requirements of their own and these are equally important to grasp.
Keep in mind that if you want to work on public projects, these will require a different set of surety bonds called contract bonds. Unlike contractor license bonds which are necessary before you can obtain a HVAC market license, contract bonds are required for the duration of a public project as a way to make sure that you do the job as promised, so taxpayer dollars are protected. Depending on your role in the project, you may be required different types of contract bonds, so take a minute to understand a bit about each one of them.
Follow these steps and you should have no trouble starting you journey to becoming a licensed HVAC market contractor. If you are already a HVAC contractor, take a minute to share your licensing insights with all aspiring contractors in the trade.