Why Every Business Needs These 6 Essential Bonds and Insurance Services?
There are many industries in which trust and accountability hold extreme importance. It is even more so in construction. The customers must have faith in you to treat their property, money and time with respect. Additionally, you must comply with various laws and ethical standards. A Surety Bonds & Insurance Services provides a monetary guarantee that you will follow do a superb job.
Surety Bonds Insurance Policy is a contract between three parties. It provides an assurance that you will fulfill terms of contract. Many businesses require them, such as car dealerships, mortgage brokers, notaries, etc.
6 Essential Bonds & Insurance Services
Following are the six key forms of Bonds Insurance Coverage that you need in your contracting business;
• Contractor’s Bond
A Contractor License Bond is necessary to secure a construction permit. The type of Bond varies with the Sate or Municipality. This Bond provides a guarantee that the contractor will follow all the laws and ethical standards. Many industries require this bond; such as home remodeling, HVAC, roofing, any other enterprise related to construction etc.
There are many factors which determine how much you will pay for the Contractor’s Bond. However, your credit score is the chief deciding factor. Some States instantly approve your surety Bonds Insurance. You must make sure to check and follow the local law, because they vary widely. After approval, Surety Bonds Direct files the paperwork for you.
• Bid Bond
Construction projects usually begin with a bidding war. Understandably, it is a tense time. A Bid Bond allows the project owners to feel confident in choosing a business’s bid. It provides a guarantee that you have the resources, financial stability and determination to fulfil the contract as specified. Bid Bonds Insurance are used to efficiently weed out the companies who lack the resources to complete a contract. They also prevent companies from entering unrealistically low bids to win a contract.
A Bid Bond clearly signifies that your business is serious about accepting a contract. This Bond generally costs 5-10% of the project’s total value. However, Government sponsored projects mandate a 20 percent coverage. The premiums depend on the size of a project, your credit history and various other factors.
• Performance Bond
A Performance Bond ensures quality a performance in the fulfillment of a contract. It is generally attached to a single project. It guarantees maintenance of a certain standard in fulfilment of a contract. The Miller Act stipulates that all federal construction projects over $100,000 have the coverage of Performance Bonds Insurance. Most of the federal projects have a limit exceeding this limit. That is why you must buy this bond to successfully obtain and fulfill such contracts.
Several aspects of a performance bond depend on the specifics in a contract. The premium typically consists of 1 – 2% of a project’s total value. The contract must carry clear and concise instructions, or expectations. It will make it easier to understand if the standards are kept.
• Payment Bond
Typically, a construction project involves a large number of subcontractors. The Payment Bond ensures that everyone involved in the project gets paid on time for their services. A payment bond is usually issued with a Performance Bonds Insurance. It forms the second half of a typical contractor’s insurance contract which ensures satisfactory completion of a project.
The premium for a performance bond consists of 1 – 2% of a project’s total value. The price varies, depending upon your credit history, among several other factors.
• Supply Bond
Unfortunately, supply and materials management issues are very common in construction projects. The nature of this business is very chaotic. Construction sites always seem like a controlled chaos at best. Many different forms of supplies and materials are required in a construction project. The project owner will naturally want assurance that the paid-for materials will arrive on time. The Supply Bonds ensures that a supplier will provide all the materials purchased by the obligee.
A Supply Bonds Insurance is quite similar to a performance bond. However, it has a narrower focus on construction supplies. The disputes over payments are handles through payment bonds. The Miller Act also requires Supply Bonds for larger federal projects. The price of a premium varies, depending upon your credit history, among several other factors.
• Maintenance Bond
Maintenance Bond is a little different from other kinds of Bonds Insurance. It applies to a job that is already complete. It covers the project owner against defects in craftsmanship, or materials. Sometimes, Maintenance Bonds are also known as Warranty Bonds.
Their pricing structure is quite similar to other bonds. However, Government agencies do not require them as frequently as the other bonds. Their popularity is much higher among private developers. The price of a premium varies, depending upon your credit history, among several other factors.
Some Additional Available Bonds Insurance Offers
- DMV Bonds
A DMV Bond is a form utilized as proof of ownership of an automobile. It makes identification easier, when regular evidence is not obtainable.
- Court Bonds
Court Bonds are a form of Surety Bonds Insurance. Its numerous types find their use if you are taking an action through the court of law.
- Fidelity Bonds
Fidelity Bonds provide protection to a businessowner against losses occurred due to employee fraud.
- Miscellaneous Bonds
These bonds are general category bonds that are not classified as other forms of Bonds Insurance.
Protect Your Resources and Interests Through the Best Bonds Insurance in Texas
SG Financial Inc. can provide you with the Best Bonds Insurance in Texas. We take pride in making sure that our clients get the best rates on Bonds as possible. Our services will make your lives easier. Contact us for information or business. we are happy to oblige.