| The Texas City Code of Ordinances currently requires all contractors and builders undertaking projects that involve the construction, erection, or repair of buildings which necessitate a permit to maintain liability insurance in the amount of $300,000 and to the City as the certificate holder to ensure proper accountability and risk management. The proposed ordinance increases the amount of insurance to $1,000,000 as recommended by the City Attorney.
Current provisions allow a contractor to provide a surety bond in the amount of $5,000 instead of the liability insurance. This provision needs revision because a bond is not the same as insurance and does not cover a contractor's liability. To protect the public and homeowners, contractors should provide insurance and a surety bond. It is recommended that the bond amount be a minimum of $10,000. The surety bond serves as a financial guarantee for the completion of the project in accordance with local laws and standards and building code. The proposed ordinance requires approval of the surety bond form by the City Attorney to ensure its compliance with all legal requirements.
Current provisions require a licensed plumber to provide insurance in the amount of $300,000. The proposed ordinance increases this amount to $1,000,000 as recommended by the City Attorney.
Current provisions do not require the posting of a surety bond by plumbers, HVAC/mechanical contractors or electrical contractors, or the provision of insurance by HVAC/mechanical contractors or electricians as conditions for the issuance of plumbing, HVAC/mechanical or electrical contractors. The proposed ordinance adds a requirement for licensed plumbers, HVAC/mechanical contractors and licensed electricians to provide $1,000,000 in liability insurance and a surety bond in the amount of $10,000.
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