When you’re working as a contractor, you want to ensure that you’re getting the legal protections necessary to help you work with peace of mind. Contract bonds for contractors, especially surety bonds, can help ensure just that.
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Pinnacle Surety offers all manner of contractor bonds, benefiting both the contractor themselves as well as the companies that work with them. From helping you find the right kind of bonds, to filling the application forms, and seeing the bond firmly in your possession, we can help from every step of the way.
Bid bonds
If you have a bid on a construction project, then bid bonds are the most basic kind of contractor bonds that you need. Any project owner you work with is going to ask you for this type of bond as it offers you both the legal protection necessary to take on the job if you end up winning the bid.
Project owners and developers require these to make sure that contractors can’t simply back out of a job once they’ve made a successful bid, which can cost them a lot of money and make them have to restart the bid process. However, it’s a legal necessity for contractors, too. If you don’t have bid bonds for the projects you are bidding on, you can expect financial penalties if you then try to back out of the job.
If you’re planning on doing any work on public work or federal projects, then you are most likely doing to need a bid bond to bid for them. Pinnacle Surety can help you find out if you’re applicable for bid bonds and streamline the application process with 24-hour turnaround on bond program pre-qualifications and approval.
Performance bonds
Performance bonds are only available in conjunctions with a successful application for a bid bond. While the bid bonds ensure that you, as a contractor, cannot back out of a project once bidding for it, these contractor bonds effectively ensure that you’re performing to the standard as agreed upon. The nature of performance bonds and what they cement depends on the terms and conditions contained in each contract but, in most cases, they are going to act as a legally binding document that states both the timeframe and cost of the project.
Many project owners will require these as they ensure that contractors cannot take on jobs but then fail to complete them. They make sure that contractors don’t have to pay the cost if, for instance, their company goes bust. It protects the liability of the contractor while protecting the finances of the project owner.
While mostly necessary for public works, many private project owners are starting to request performance bonds and Pinnacle Surety can make sure that you get the bonds that suit your needs. We can help you find out if it’s necessary and help you complete the legal process to get you one as prompt as we can.
Subdivision bonds
Also known as site improvement or completion bonds, subdivision bonds are usually expected of property owners and developers, rather than explicitly being for contractors. However, contractors may want to make sure that any developers they work with have the necessary subdivision bonds necessary to avoid any potential legal trouble that could interrupt their work.
Basically, subdivision bonds transfer the financial responsibility of completing land improvement projects from the public entity normally responsible for them to the property owner or developer. This can include improvements like street improvements, paving, curbs, grading, gutters, storm drains, sewers, erosion control, and much more.
These bonds are exclusively used in projects that will involve any improvement work being done on behalf of or partnership of a public governing agency. However, as mentioned, contractors may want to seek the guidance of Pinnacle Surety to know whether or not the project owner or developer they are working with should have one of these bonds in place.
Payment bonds
Another type of surety bonds for contractors that are required alongside a bid bond and a performance bond. As with the other two types, this bond is required for most contractors to ensure some financial protection on behalf of the project owners. In this case, the protection ensures that contractors pay any financial costs associated with buying any materials, hiring subcontractors, paying off any labor costs, and so on. Effectively, they’re designed to ensure that contractors don’t leave project owners covering costs that they’re responsible for.
In contract work, the contractor is responsible for funding their own work, not the project owners. The costs should be factored into the bid, not spent in excess of it. Any additional costs not factored for in the initial estimate should be paid by the contractor and these bonds ensure it.
Like bid bonds and performance bonds, these are typically required on public projects, but more private project owners are starting to use them as well, so Pinnacle Surety can ensure that you’re using them when necessary.
Get all the help you need with contractor bonds from Pinnacle Surety
At Pinnacle Surety, we specialize in all manner of construction bonds, including construction contract bonds and developer surety bonds. If you don’t see the specific type of bond you need mentioned above, then don’t hesitate to get in touch with our team. We will work with you to ensure you’re not left at risk of being found non-compliant.
Our team has been working with construction teams, developers, and contractors for over two decades. As such, we have a very good understanding of what kind of surety bonds workers and business owners need in every part of the industry. Get in touch with us today and we can offer you a quote to help you get started on the path towards security.