Examining Surety Bonds With FAQs
Sometimes, your business might hire another company to help with a project. While those jobs can go smoothly, at other times, the hired company may not fulfill the contract appropriately. What that happens, the original business is held responsible for the losses since they are the ones in charge of the overall project. Surety bonds can help get the project completed by the company hired and hold they liable for the project as well. These bonds are popular in the construction and commercial industry, but a lot of business people have questions about them. Here are some of the more frequent questions regarding surety bonds.
How Much Do Surety Bonds Cost?
Since surety bonds are kind of like a type of insurance, their costs vary depending on how much coverage you need. The specialists in the market can help you assess your needs and match you up with the right bond for your specific situation.
Where Can You Get A Surety Bond?
You can get these bonds by an agency that has the licensing to issue the bonds within your state. Before you contact an agency, you will want to think about what kind of bond you need in order to contact the right agency. Most agencies that deal will bonds will be able to tell you if they have what you need, but it’s easiest to approach a company that already has it.
When Are Surety Bonds Required?
There are legal requirements that sometimes necessitate surety bonds. Those requirements depend on where you work and the type of job you are doing. Many government jobs, for example, mandate that surety bonds be used within certain businesses to protect consumer interests. They are also often required for business owners to get a license of operation within certain states. Researching the regulations is important to ensure you do what is required within your state and industry. The experts in surety bonds can help with that as well.
Will Credit Ratings Affect Costs?
Surety providers are offering a financial guarantee on your work and they will examine your application before giving you a bond. They will look over your work history, credit score, and financial records to see how reliable you are. If you have good credit, you will probably have lower fees for your surety bonds. Poor credit doesn’t always disqualify applicants, however. While feels might be higher, those with poor credit can still find reasonable costs for surety bonds when they need them.
Isn’t Insurance The Same Thing?
In a word, no. Commercial and construction bonds are two different things and they are different than insurance as well. Because so many problems arise in these industries, guarantees are necessary for the maintenance and performance of the projects at hand. While they feel somewhat like insurance, they act in a completely different nature.
Understand Surety Bonds Further
If you have more questions about surety bonds, contact the professionals at Nickerson Insurance Services to figure out what you need, how much you need, and when you need it.