When operating in the construction sector, it’s imperative that you take the necessary precautions to protect your company, subcontractors, and clients. While this is important for all types of work throughout the State of California, it takes on even greater importance when dealing with government contract work. Contract Bonds are crucial elements that must be put in place before you even begin work on a project site.
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Pinnacle Security can guide you through the process in super quick time, allowing you to focus on the work at hand.
A Quick Look At Payment And Performance Bonds
As a contractor in the field of construction, you should know that there are several types of Surety Bonds for the Construction Industry. While all insurance packages are ultimately designed to serve a similar purpose in that they protect all parties involved in the project, appreciating the unique elements of each type is vital.
Payment bonds and performance bonds are easily confused. Here’s a brief look at the differences between the two:
Payment Bonds
Payment bonds are used to protect the contractor by covering the costs of labor and maintenance. As far as the client is concerned, this ensures that the job will be completed. This covers subcontractors for public projects too.
Applicants with strong credit histories will often be awarded payment bonds for just 1%-4% of the total amount that could be paid out by the surety provider.
Performance Bonds
Performance bonds are used to protect the client by ensuring that the level of workmanship will meet the brief and guidelines set out at the time of accepting the job. If this doesn’t happen, the government project manager can sue and hand the work over to someone else.
Whether looking at payment bonds, performance bonds, or any other type of surety bonds, painting a clear image of the situation is vital. When you take the time to do this, not only will it help you find the incentive. Crucially, it’ll also help you realize which insurance packages are worthwhile and which are best left alone.
As a contractor working the State of California, there are a number of surety bonds to consider for your government project work. Bid bonds, maintenance bonds, and construction bonds may all be on the agenda too, although they won’t necessarily be essential for all jobs. However, payment and performance bonds both fall into the ‘must-have ‘ category.
Private clients may be willing to take the risks, but managers of public construction jobs won’t even consider bids from contractors without these crucial items in place. After all, without the right type of insurances in place, you may contravene various acts o the California Civil Code and Business and Professions Code.
If you do somehow land the job and cause a problem, even through no fault of your own, this type of client won’t let you off lightly. Therefore, it’s always better to be safe than sorry. Do not forget it for a second. The future of your bids and works on government projects hang in the balance.
How To Gain Payment Bonds & Performance Bonds
Given that you are likely to need both types of insurance bonds for your government construction works, it makes sense to complete both aspects in one application. Pinnacle Security is the best place to do it.
It can be tempting to handle the assignment of getting covered through internal research. However, the truth of the matter is that only an award winning surety bond company can help you find the very best options on the market. This means gaining the most suitable payment and performance bonds at the very best prices. Make a wrong decision through a lack of experience, and you may be left in a vulnerable position.
Pinnacle Security makes the whole process easier than you ever thought possible. Simply enter your license details and follow the on-screen instructions. We’ll do the hard work before presenting you with the best options on the market. Protecting your company and sub-contractors ahead of the forthcoming projects truly is that simple.
In addition to being the most practical solution, this provides the reassurance of knowing you’re covered in the right fashion. Should something go wrong on the project, you can face the repercussions knowing that the necessary preparations have been taken.
Recap
Payment bonds and performance bonds are both essential preparations for any contractor in the field of construction. This is especially true when bidding for government and public projects because failure to take those steps will inevitably lead to some very serious repercussions. Most importantly, you’ll find that jobs are awarded to your competitors. The fact that you could be more vulnerable on the project sites should not be ignored either.
Take the first step to protecting your venture today by contacting Pinnacle Security. It’ll be one of the smartest moves you’ll ever make.