If you work as a contractor in the realm of construction or any related field, you will almost certainly need to put a number of contracts in place. From contract bonds to subdivision bonds, Pinnacle Surety can provide a winning service to ensure the best outcomes are reached for all parties involved.
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It can be a confusing environment, but our support will make everything feel less daunting. For the sake of your future projects, financial security, and sanity, here’s all you need to know.
Who Needs A Contract Bond?
Contract bonds are essentially a group of insurance premiums that protect all parties within a construction project by providing financial guarantees that the job will be completed to the acceptable standards as laid out by the contract. While it is something that serves the client as well as the contractor, the latter party is responsible for putting the safety net in place.
It doesn’t matter whether you are an individual contractor, a company, or a business that will be using subcontractors to complete the job. If you are responsible for the construction of a project, you should put a contract bond in place.
In fact, if you are working on a Federal Government project, you will be legally obliged to put the contract bonds in place. Even if this isn’t the case, though, most clients will show a clear preference to contractors that have taken a responsible approach to this key aspect of project management.
Essentially, then, if you’re a contractor planning to work on a project, it’s vital that the work is protected with this type of insurance bond.
Why Choose A Contract Bond Agency?
As with many business endeavors, you would be forgiven for taking the mindset that it’s better to do things internally. After all, in an ideal world, you’ll never need to rely on the contract bond anyway. Honestly, though, this is one assignment that needs to be handled by a professional service – we’ve seen far too many contractors suffer as a result of trying to do it all themselves.
When choosing a contract bond agency, you will see many benefits. They include, but are not limited to;
- Optimal financial protection, even against issues that are out of your control.
- Contracts are filed in a fast fashion with the appropriate bodies.
- Save time by avoiding these tasks, allowing you to focus on the business.
- Peace of mind from knowing that the key task has been handled correctly.
- Happier clients as they know their funds are protected too.
Ultimately, then, using a contract bond agency is the best solution for your business, clients, and self. From a financial perspective as well as a practical one, this is the right route to take in almost every scenario.
Why Pinnacle Surety?
Deciding to use a professional service is one thing, but finding the service that has your best interest at heart is another altogether. Pinnacle Surety is a contract bond agency that works diligently to ensure that you are connected to the right surety insurance provider under the right conditions.
There are many reasons for choosing Pinnacle Surety as your bond agency. Many of them stem from the fact that we are a dedicated service that focuses solely on the concept of surety bonds and contractor licenses. We additionally boast over two decades of experience in the field.
This means that we’ve seen it all before and know which path to take to reach the best agreement for you. Likewise, we have a huge network of surety companies at our disposal while our reputation is second to none. You can subsequently use our service with immense confidence.
Unlike many, our agency appreciates that we are working for you. This is why we pride ourselves on providing the ultimate customer care. We stay transparent through every step of the contract bond agreement process. Best of all, it allows you to focus on winning the project contract and fulfilling the construction obligations in the best way possible.
What Contract Bonds Will I Need?
Interesting (well, we think so) fact: contract bonds can be dated back nearly 5,000 years! That’s incredible considering where human civilization was back then. Unsurprisingly, though, the concept has evolved into a far more complex situation.
Ultimately, though, there are three main surety bonds that you will need to consider throughout the project.
Bid bonds cover the bidding process, and confirms that the bidder will enter into a contractual agreement should the project be awarded. It also guarantees that the contractor will take out the other two surety bonds as and when required.
The bid bonds cover between 5% and 20% of the projected cost of the job. This is usually set to 10%.
Performance bonds essentially guarantee that the contractor will complete the works as laid out in the contract. This includes hitting the project deadlines and within the budget that has been agreed – unless both parties then agree to change this at a later date.
The surety company provides a financial safety net that protects client and contractor alike.
Payment bonds ensure that the project manager will not have to pay the subcontractors and material suppliers. This is the responsibility of the contractor, and the surety bond covers the costs that are associated with the project.
In most cases, the payment bond covers first and second tier subcontractors, laborers, and material suppliers.
You can learn more about each of them by reading our contract bonds services page.
The Final Word
Quite frankly, you shouldn’t even consider trying to win a project without protecting yourself through the necessary contract bonds. Otherwise, unforeseen circumstances could ruin your entire business let alone the project in question. So, while it may be seen as an insurance premium that’s there to protect the client, it actually serves you better than anyone.
Whether you need support with your next bid bond or wish to discuss the whole process with our friendly experts in greater detail, do not hesitate to get in touch today.
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