Most companies guarantee their work, but Jonathan McGrath Construction takes it a step further. For the past five years, the Orlando remodeler has enlisted the services of Bonded Builders, an insurance and underwriting company that backs up a contractor's warranty.

For a nominal fee, Bonded Builders guarantees restitution to McGrath Construction clients should the remodeling company be unable, for whatever reason, to service a warranty. “If something should happen to our company; if we would go under or we would no longer exist, for whatever reason, [the client has] someone else they can go to for the warranty work,” says Marion McGrath, co-owner of the Florida remodeling company.

A MENU OF OPTIONS The insurer offers an a la carte list of options including 1- or 2-year coverage of materials and workmanship or mechanicals; 5- or 10-year major structural warranties; and extended appliance warranties. Costs vary depending on options and the total cost of the job being warranted, but top out at a few hundred dollars even with a full plate of options. For example, a 1-year materials and workmanship warranty on a $150,000 to $300,000 job is $237; adding 5-year structural coverage adds another $109.

Bonded Builders also offers mediation services should a homeowner and remodeler fail to agree about workmanship.

The remodeling company pays Bonded Builders from its overhead as an insurance cost.

EASIER SELL Ultimately, McGrath says, buying a Bonded Builders warranty isn't about the services the company offers — McGrath Construction always takes care of its clients. Rather, it's about providing reassurance to worried clients, especially those who have heard the fly-by-night–remodeler horror stories.

“To be honest, the third-party warranty is more of a marketing thing,” McGrath says. “It provides clients extra peace of mind. You know, we're not a big national company. We have a pretty strong presence in central Florida, but people are concerned; if something should happen to our company, what will happen if they have a warranty issue? Having Bonded Builders backing it just sells the job a little easier.”

To that end, Bonded Builders provides contractors with job-site signs and brochures, which McGrath Construction includes in its marketing kit. The brochure spells out exactly what's covered and outlines the rigorous underwriting process, which requires that contractors submit proof of certification and insurance, as well as financial statements and a customer service history.

“They don't just take anyone,” McGrath says, which makes companies that buy the service look that much better to their clients.