Feb 12
13
Contractor Bonds, How Do You Get Them
Contractor Bonds, How Do You Get Them
Article by Marcel Rain
The documents that provide financial protection during a construction project are known as contractor bonds. They protect contractors in a number of ways. Some examples are, if a job is not completed as originally agreed or the contractor abandons the project, the appropriate bond would provide coverage for the necessary amount.
But, where do you get these types of bonds? Contractors can buy bonds form a surety company that specializes in these types of bonds. The contractor will be required to pay the premiums to keep the bond active and current.
Premiums for contractor bonds can vary. This will all depend on the contractor’s history of work and licensing. This will give the bonding company the total amount of the needed bond. Should a consumer make a claim on a bond, they will make contact in writing with the surety company. They will be required to produce sufficient evidence to back up any claims they make. This will usually consist of an order of what happened, pictures, exhibits and proof that the contractor has abandoned the job. Or, the consumer can make a claim that the contractor ordered and used materials without having paid for them. These allegations will also need proof as well.
To know more about a surety bond, contact an agent that deals with these types of contractor bonds. The terms can vary for each bonding company. Markets change yearly and a surety company may need updated financial information in order to renew your bond. Some information that may be required will be updated business financial reports. What these are essentially, would be reports of what your financial situation looked like at the end of the year. More than likely your most current quarterly statement will suffice as the required information.
Updated credit reports will possibly be the next piece of information that is required to renew or obtain contractor bonds. Credit reports that are not older than 30 days will be needed. Your personal financial information may also be required. This statement should not be dated older than 30 days of the application.
All this information is required for the surety company to insure that everything meets their bonding requirements. Remember, a surety bond is a loan designed to keep the customer safe from fraud or other complications. Also, if you have your bond extended, you will only have to give this information once every two or three years. This is much better than having to present it every single year.
About the Author
Marcel Rain founded Statewide Insurance Brokers in 1995, insurance agency specializing in contractors insurance. The company has provided insurance for thousands of contractors. They are able to get proof of insurance in 30 minutes. This includes Commercial Liability, Workers Compensation, Surety Bonds. and Commercial Auto and Truck Insurance. You can get a very competitive, very fast quote at http://www.st8wide.com.
