Some Florida construction businesses designate financially responsible officers, and those officers need to get a $100,000 surety bond. Find out what they do and why they need a surety bond.
What is a financially responsible officer?
Florida financially responsible officers do just what their name implies�they take on responsibility for all financial aspects of a construction business. They have authority over all financial aspects of the business, including contract approval, checks, and payments on the business’s behalf. These officers are separate from primary qualifying agents, individuals who are responsible for general business and project management.
Financially responsible officers�need to submit an application with the Florida Department of Business and Professional Regulation (DBPR). Some of the information the application requires for new officers includes:
- Name of construction business for which applicant will be the financially responsible officer
- Construction business’s primary qualifying agent’s name and license number
- Applicant’s personal information, including social security number and any other names the applicant has used
- $100,000 surety bond
- $200 application fee
- Credit report for applicant from a nationally recognized credit reporting agency
- Proof of satisfaction of any liens, judgments, and bankruptcy discharges, if applicable
- Electronic fingerprints
If the officer changes or is removed another application needs to be submitted to the DBPR to confirm the changes. Make sure to fill out the correct sections of the application�II and VIII for removing an officer, III through VIII for a new officer, and the entire application for changing officers.
Why do officers need a surety bond?
Financially responsible officers in Florida need a surety bond for the protection of the state and consumers. The Construction Industry Licensing Board is the bond’s obligee, or the entity requiring the bond. The $100,000 bond is the officer’s promise to accurately keep the business’s books and records and pay the State Treasury all required payments.
Should the financially responsible officer fail to keep accurate records, or fail to make required payments to the state, the surety bond is a means of recovering any lost funds. A claim can be filed against the bond, and the surety pays out on any proven claims. Then, the principal (the officer) is required to reimburse the surety company. This way, the state isn’t held responsible and doesn’t lose money if the officer fails to adhere to the law.