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Question DetailsAsked on 5/23/2018

Do contractors put costs for their fees for State Licenses, Workerscomp, legal coverage in their quote? $3,800

remodeling condo, architectural and engineering and plan runner $4,200, bringing electrical up to code $4,400 and then Electrical and Plumbing and GC companies fee for their State Licenses, General Liability and workers comp, provide legal coverage including inspections another $3,800.00. I never heard of that. R they not supposed to have all that by Florida Law to obtain a GC license?

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1 Answer


Certainly sounds funny - like this is the first and only job the guy has ever done, assuming (check state contrator licensing board website) that he is actually licensed as a GC.

All those items are legit business operating costs (though of course not applying all his annual licensing and insurance costs to only your job) - but itemizing them like that is very odd. Would normally either be embedded in his billing rates (as a markup on labor and possibly also subs and materials), or be applied as an overall overhead markup on the job cost total. Different contractors cover their overhead costs like that different places - some apply a general overhead to ALL their direct and sub and materials costs (so maybe about 25-50% across the board), some charge a smaller markup like 10-20% on materials and subs and then use a higher business overhead (like 50-100% commonly, up to 125-150% sometimes with specialty companies) on the labor only to cover their business operating / overhead / admin costs.

Certainly if you decide to go with this guy before signing a contract I would be sure he is actually properly insured, bonded, etc - google this search phrase to see a number of Angies List articles on that subject -

angies list contractor insurance and bonding

And bear in mind - regardless of how a contractor applies his overheads and such (though be careful of extreme or disproportionate weightings which might be designed to increase his profit in the event of overruns or change orders or such), the bottom line is what you are looking at. Compare competing bid bottom lines (usually get at least 3 competitive and responsive bids for a remodel job) between various contractors and then weigh those total job bids against how you feel about the contractor's themselves - the "warm fuzzy factor", and their reviews and ratings, before selecting one.

Also - from what you stated this sounds like a rewire job, not a remodel - I see $4200 design and plans, $3800 overhead and permitting/inspection fees, and only $4400 in actual work ? Sounds like a lot of design cost for only $4400 in direct costs for the work. You also listed $4400 to bring electrical up to code - no plumbing or carpentry, drywall, interior finish work, etc ? Is there a lot more "work" to this job than you mentioned ?

Answered 2 years ago by LCD

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