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.
