Get a Surety Bond When You Need to Offer a Guarantee

Few things in life offer a predictable and guaranteed outcome, but surety bonds do just that. A surety bond is a three-party contract between a company (the contractor), a person or company acquiring the contractor’s services (the client), and an outside agent who guarantees to the client that the contractor will deliver as promised.

Surety bonds performance and payment are special kinds of surety bonds. A performance bond is a guarantee that the contractor will complete the job and will meet all of the contractual expectations. A payment bond is a guarantee that the contractor will pay all of its subcontractors and suppliers. In both cases, the surety company takes on the risk associated with the project, moving it away from the project owner.

The Benefits of Bonding

During the application and bidding process, your potential client needs to get to know you well enough to be able to rely on you to deliver what you say you will. By offering performance and payment bonds, the client can be reassured that an outside company screened you carefully and has looked at your:

  • Qualifications for the job
  • Commitment
  • Financial stability, including banking relationships
  • Necessary equipment
  • Past performance
  • Dependability
  • Competence

This benefits both you and the client. It vouches for your reputation and capabilities and it gives the client assurance that you will fulfill your commitments.

Offering surety bonds performance and payment is the best way to assure your potential clients that there is no risk to hiring your company.

Categories: Insurance, Surety Bonds
This post was written by , posted on February 11, 2016 Thursday at 7:30 pm

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