you’re a contractor who works on city, state or federal projects, chances are
you’re familiar with various surety bonds. Because governments want to ensure
that taxpayers’ dollars aren’t being wasted, many public projects (particularly
those that exceed $100,000) must be bonded for financial protection. Let’s take
a brief look at supply bonds, which are a type of contract bond.
bonds act as a contract between three parties. In the case of supply bonds, the
bond ensures that the supplier will deliver materials as promised in the
project contract (but there is no contractual obligation on labor). If a
contract breach occurs, the surety company is responsible for compensating the
project owner for losses, for which the supplier will have to repay the surety
state has varying laws when it comes to posting supply bonds. Wondering if you
need one for a project? Your independent insurance agent can help you sort out
the details. When applying for a surety bond, you’ll need to provide
information such as your business’ financial statements,
proof of insurance and even your personal credit score. This helps determine
how likely it is that you’ll trigger a claim, which goes into calculating the
premium of your supply bond.
application process makes it nearly impossible for contractors with poor credit
to obtain contract bonds, including supply bonds. If your business is new, you
may pay a higher percentage of the bond price as you accrue credibility. But
with experience comes lower premiums and larger projects.
Find the coverage you need. Call Insurance
Agent2000 at (925) 827-0510 for more information on Concord surety bonds.