As a business owner, you need a surety bond to protect your best interests. Therefore, you have to choose the right surety bond company to make sure you are protected. When choosing from the many surety bond companies around, see to it that you exercise common sense when evaluating the companies according to their track records, reputation, and bonding processes.
Typically, the construction industry uses surety bonds for their projects. Simply speaking, a surety bond is just an agreement between the surety company, the contractor, and the owner. With a surety bond, the owner is guaranteed that his project will be finished by the contractor. Likewise, it also protects the owner when the contractor stops working on the project.
Surety bond companies are considered part of the insurance industry. The main role of these companies is to guarantee the commitment of the contractor to follow a contract. Some surety companies though may charge a premium for backing a contractor.
The risk associated with underwriting a contractor leads these companies to do extensive research on contractors they hold bond with. You can expect these surety companies to ask for references from the contractor as to their experience in completing a contract. Aside from this, surety companies will also investigate if the contractor has the necessary workforce and equipment to carry out the completion of the project. Other factors to be considered by surety companies include bank relationships, credit history, and current lines of credit.
Prior to working with a surety company, you should ask what other people have to say about them. Consult other businessmen who have experienced working with these companies. Then, perform your own research and check if the company is licensed with the US Treasury Department. Another important thing to check about the company is the bonding process they employ when choosing their contractors.
Lastly, see to it that your communication lines are open with the surety bond company so they can properly underwrite the contractor and get you fully protected from any liabilities.
Typically, the construction industry uses surety bonds for their projects. Simply speaking, a surety bond is just an agreement between the surety company, the contractor, and the owner. With a surety bond, the owner is guaranteed that his project will be finished by the contractor. Likewise, it also protects the owner when the contractor stops working on the project.
Surety bond companies are considered part of the insurance industry. The main role of these companies is to guarantee the commitment of the contractor to follow a contract. Some surety companies though may charge a premium for backing a contractor.
The risk associated with underwriting a contractor leads these companies to do extensive research on contractors they hold bond with. You can expect these surety companies to ask for references from the contractor as to their experience in completing a contract. Aside from this, surety companies will also investigate if the contractor has the necessary workforce and equipment to carry out the completion of the project. Other factors to be considered by surety companies include bank relationships, credit history, and current lines of credit.
Prior to working with a surety company, you should ask what other people have to say about them. Consult other businessmen who have experienced working with these companies. Then, perform your own research and check if the company is licensed with the US Treasury Department. Another important thing to check about the company is the bonding process they employ when choosing their contractors.
Lastly, see to it that your communication lines are open with the surety bond company so they can properly underwrite the contractor and get you fully protected from any liabilities.
About the Author:
Shop online to find the best rates from surety bond companies, enabling you to easy compare providers. You can also shop online for a fidelity, or employee dishonesty bond to find the best rates.
Posts
No comments:
Post a Comment