As a contractor, you know that the industry has some strict regulations when it comes to state and federal projects, but it can be difficult to determine the right bonds for the job with so many options out there. You already know that you need certain bonds before you can legally break ground, but which bonds?
Here’s a brief overview of the most common bonds for contractors. For more details, contact your independent insurance agent.
· Bid bond: Ensures that the contractor who wins the project bid will obtain a performance bond and begin work in a timely manner. Bid bonds are required during the bidding stage, before the contract is awarded.
· Performance bond: Ensures that a contractor will complete the job according to the details and timeframe listed in the contract. If the contractor defaults, the surety company must find a replacement or compensate the project owner for losses.
· Payment bond: Ensures that subcontractors, suppliers and laborers are compensated fairly for their contributions to the project.
· Supply bond: Ensures that the project owner will be compensated in the event that the supplier cannot provide materials as promised.
· Subdivision bond: Ensures that the contractor makes mandatory improvements during the construction of a subdivision, which may include sidewalks, curbs, gutters and other items as mandated.
· Site improvement bond: Ensures that the contractor makes mandatory improvements to an existing building, while ensuring that new work remains within building code.
Questions about bonding your business? Call Security First Insurance Agency at (810) 732-5800 for more information on Flint surety bonds.