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A Contractors Bond Will Protect You


Very often, we are exposed to risks in construction, and that is when contractors bonds come in useful. Investors in construction projects use these bonds to ensure protection against failure to meet specifications of a contract and also to make sure that a project’s bills are not left unpaid.  Contractors bonding company Florida is best geared for these bonds.


Facts to Know

When entering a construction bond, one should choose the best contractors bonding company Florida to ensure that there is no problem. Facts that you should know about contractors bonding are:

·         It is a surety bond used by investors in construction projects.
·         It protects against any financial loss because of failure on the contractor's part to complete a project or meet the specifications.
·         The professional who buys the contractor license bond is the principal.
·         Whoever requires the contractor to be bonded is the obligee.
·         The company issuing the bond and guaranteeing the contractor's obligation is the surety.
·         The party which manages the construction work signs the bond stating that he will complete the job according to the contract.
·          The surety and contractor will both be held liable if the terms of the contract are not fulfilled.

What to Remember

Remember that contractor bonds are legally enforceable contracts and failure to abide by it can cause claims to be made for compensation for damages by the obligee. Thus it is of great importance that you get the proper contractors bonding company Florida to do your job.

The surety underwriters, unlike traditional insurance policy underwriters, consider the policies they write to have no risk and even if a claim was to be made, the contractor is required to reimburse the surety.

 The obligee usually would list a contractual job that is required and to avoid financial loss expects all contractors to put up a bond. The selected contractor is the one with the lowest bid price. 

Submitting a bond means that the party who is managing the work is confirming that the job will be completed according to the policy.

The party managing the work is also assuring that his financial means are stable and he can manage the project.  

 The surety makes an extensive background and financial check before approving a bond.

Guidelines

When getting a construction bond, there are certain guidelines to be followed.

·         Making sure that a contract bond is required.
·         Acquiring a bid bond from the contracting bonding company to submit with the proposal.
·         If the contract is awarded then, approaching the agent for a performance bond.
·         The surety can replace a contractor if he does not keep to the contract terms

 Anyone who is looking at getting work done can now rest assured that he is safeguarded even if the contractor fails to complete the job he is doing. They will be safeguarded by the bond. On the other hand, the contractor needs to be careful when taking responsibility for a job and signing a contractor bond. He should make sure that he can meet unforeseen trouble.