Advertising is a form of communication intended to persuade an audience (viewers, readers or listeners) to purchase or take some action upon products, ideals, or services. It includes the name of a product or service and how that product or service could benefit the consumer, to persuade a target market to purchase or to consume that particular brand. Commercial advertisers often seek to generate increased consumption of their products or services through branding, which involves the repetition of an image or product name in an effort to associate related qualities with the brand in the minds of consumers.
Most contractors know that they must include their license number on all advertising. But do you know what that really means and what the laws really say? Business and Professions (B&P) Code Section 7030.5 states that all licensed contractors are required to include their license number in “(a) all construction contracts; (b) subcontracts and calls for bid; and (c) all forms of advertising, as prescribed by the registrar of contractors.” The Code further provides that failure to comply with this requirement can result in a fine between $100 and $1,000 for a first offense.
The following tips for advertising will not only help you comply with the law, but will also help you plan your marketing strategies for success as a licensed contractor.
1. Include your Contractors license number in anything that might be considered as advertising.
Examples include: newspapers, radio, television ads, your business card, any contract proposal, lettering on every one of your commercially registered vehicles (See B&P Sections 7029.5 and 7029.6), signs or billboards identifying your company as a contractor, your company’s website, any soliciting brochures or pamphlets, any clothing or promotional items that include your company name and logo; and any directory listing that states or implies you are looking for work or services which would require a contractor’s license.
2. Don’t use false or misleading advertising, or advertise a price that you don’t intend to honor.
B&P Section 7161 makes it a misdemeanor “for any person to ….[use] false, misleading, or deceptive advertising as an inducement to enter into any contract for a work of improvement, including, but not limited to, any home improvement contract, whereby any member of the public may be misled or injured.”
3. Don’t advertise to do work that you are not licensed to perform.
Contractors who advertise to do work beyond the scope of their license are subject to a fine of not less than $700 and not more than $1,000, plus any other punishment established by the Registrar of Contractors or a court. Such offenses are deemed misdemeanors according to B&P Section 7027.1.
4. When advertising about asbestos removal services, be sure to include your asbestos certification and registration numbers along with your business name.
Contractors must list their asbestos certification number issued by the Board and the registration number required under Labor Code Section 65015.5. The Registrar will issue a notice to comply if either of these numbers are omitted. If a contractor fails to comply after receiving notice, a citation will be issued as well as potential fines ranging from $100 to $1,500.
5. Don’t advertise about bonding.
Contractors are prohibited from including any reference to the contractor being “bonded” in any advertisement, or on any company “paperwork” that could reasonably be considered “advertising”, if the bond being referred to is the standard license bond that all California Licensed Contractors must have. B&P Section 7071.13 provides that any such references or presentments are grounds for discipline and/or suspension of the contractor’s license.
6. Be VERY careful when advertising as “insured”.
CA licensed contractors cannot advertise that they are “insured” unless they state what type of insurance it is. Any reference to “insured” in your company‘s advertising must specifically state the type of insurance you are referencing. Failure to properly identify the type of insurance in the advertisement is cause for discipline pursuant to B & P Section 7027.4. If for example you want to advertise that you carry both commercial general liability insurance and worker’s compensation insurance, then it should be stated as such, “We carry Commercial General Liability and Worker’s Compensation Insurance.”
Knowing the law can help keep you out of trouble with the CA State Contractors Licensing Board and prevent legal problems that can arise from mistakes.
1 See Wikipedia @ http://en.wikipedia.org/wiki/Advertising .
A misdemeanor is a crime punishable by imprisonment in a county or city jail or detention facility not to exceed one year. Except where the law specifies a different punishment, a misdemeanor is punishable by imprisonment in a county jail not exceeding six months and/or a fine not exceeding one thousand dollars. See California Penal Code Section 19.