Most homeowners don’t give their warranty the proper attention it deserves – that is until something goes wrong. Then, they scour the warranty to validate their latest claim and push liability back on you. However, regardless of homeowner indifference, warranties are still vital in doing business with your customers. In many cases, a warranty can be a strong selling point!
A warranty is your promise to stand behind your products and services. It lets your customer know that you will repair or replace a defective component or that you will correct an error in your work, if necessary. Warranties protect both you and your customer through a binding agreement that is enforceable by law, and ensures that both sides act legally and properly in a dispute.
Understanding the Two Main Types of Warranties
The first thing that your customers need to understand is the type of warranty they’re looking at so that they know what to look for. For instance, if you install a new roof, there may be a separate warranty for your labor and the materials you use to complete the job! These two types of warranties cover very different issues that arise after the job is done.
Manufacturer Warranty
While you stand behind your work, you can’t always guarantee the quality or sustainability of the materials you use. What happens when faulty wiring catches on fire, a weak pipe bursts, or asphalt shingles crack and tear prematurely? A manufacturer’s warranty covers product defects so that you are not liable when the products do not perform as expected.
Contractor’s Warranty
Also known as a labor warranty or craftsmanship warranty, the contractor’s warranty is your personal guarantee that the work you performed on the job meets or exceeds all industry standards, city and state codes, and safety standards. If anything goes wrong after you complete the work and you are responsible, you will correct the error according to the contract’s terms and conditions.
You may personally guarantee and be liable for the labor and the materials in some cases. If you are a licensed and certified contractor for a specific manufacturer, your warranty may include the manufacturer materials you use.
What to Include in Your Warranty
With all the possible issues surrounding your industry and your business, the only thing your clients care about is whether they can trust you to keep your word. Unfortunately, It’s not as simple as that. Various problems can arise in contract work that forces you to address every detail to cover your tracks and protect your clients. Warranties exist to cover Murphy’s Law so that there are no surprises when problems and subsequent disputes happen!
With this in mind, the following items in your warranty will bring your customers peace of mind and answer nearly every perceived question in advance:
Materials and Equipment
All materials and equipment that the customer pays for are outlined in detail in the warranty. Any applicable manufacturer warranties are also provided – either in the contractor warranty or as a separate warranty. Only include the materials that are covered under warranty.
The Scope of Work
The scope of work is defined under the contract and details the type of work you and your team will perform to complete the job. Only include the work you performed under the contract and not any work you performed as an additional service. The warranty guarantees that
- The work is free from defects
- The work is free from material defects
- The work is performed according to industry standards
- The work meets or exceeds all city and state codes
Warranty Exclusions
In addition to protecting your customers, a warranty relieves you from the responsibility of fixing any problems if the damage or defects are not your fault. Some examples of warranty exclusions may include
- Changes in your work that you did not perform or were unaware of
- Damage or abuse to your work caused by your customer or a third party
- Improper or unintended use of your work or the materials you used
- Owner’s failure to maintain the used materials according to required specifications
- Normal wear and tear of materials
Keep in mind that customers are as interested in what the warranty does not cover as what it does. So, make sure you include a detailed list of warranty exclusions so that there is no confusion in the event of a dispute.
Call Back Remedy / Warranty Expiration
Your warranty should clearly outline the expiration date for any callbacks. It contains any provisions requiring you to fix or cure any problems resulting from job errors. Although you can set the expiration date whenever you want, the standard in most contracting industries is one year.
Remember that the one-year warranty should cover any material damage that occurred as a result of your work. If you installed a new stove, and it caught on fire due to a bad wiring configuration, then you are responsible for fixing the wiring and replacing the stove if the customer makes a claim within one year of job completion.
Clauses
Clauses often head off any possible legal action that could bury your business. They range from expiration dates and flow-down warranty obligations to manufacturer errors and special cases. When adding clauses to your warranty, you may want to consult a legal expert or seasoned contractor in your field. There are some clauses – too many to name here – you should add to your warranty and others you should avoid.
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