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Surety Bonds for General Contractors Explained
As a general contractor, have you ever wondered how surety bonds can benefit your business and protect you from financial risks? Are you familiar with the different types of surety bonds required for your contractor license? Understanding surety bonds is crucial for general contractors in the construction industry, as they play a vital role in building trust with clients and ensuring project completion.
Understanding the Obligee in a Surety Bond
Did you know that the role of the obligee in a surety bond is crucial for ensuring the successful completion of projects? Without the obligee’s involvement, the entire bonding process would be at risk. In this article, we will explore the significance of the obligee in a surety bond and their essential responsibilities.
Understanding Performance Bonds: A Quick Guide
In construction projects, lots of factors can influence success. Performance bonds are one of these factors. But what are they, and how do they work?
5 Essential Tips for Quick Surety Bond Approval in Construction
The underwriting evaluation is a crucial step in the surety bond approval process. During this stage, the surety bond company reviews the application and assesses the applicant’s qualifications and risk profile.
Finding and Securing Construction Surety Bonds: The Ultimate Guide
Securing a construction surety bond is essential for large-scale projects, serving as a pledge for quality completion and fairness. Necessary for gaining trust and meeting certain legal requirements, it’s vital for project success. Our guide simplifies understanding and selecting the right bond, beneficial for both large teams and small businesses.
How to File a Surety Payment Bond Claim
Subcontractors, suppliers, and labor on construction projects face a unique but constant threat. What happens when the prime contractor on their projects does not pay for their work or materials? If the prime contractor was bonded, there is recourse. However, filing a claim can be complex. In this guide, we will help you understand and follow the steps to complete the process successfully.
Assessing The Agent: How To Know If It Is Time To Switch Surety Agents
How do you know if your bonding agent is the best fit for you and your company? Is a change necessary?
This article focuses on surety bond agents, but can be applied to all of your trusted business advisors, including your CPA, banker, attorney, wealth advisor, etc.
Becoming Bond-able
Many contractors are wary or unsure of how to create a bonding program or obtain their first surety bonds. The process can actually be quite simple, and best of all, there is no cost to get started. The first step involves understanding your personal credit score. All owners with more than a 10% stake, and their spouses, will have their credit checked (a soft pull) by the surety underwriter. If the scores are over 700 FICO, and there are no bankruptcies or tax liens, you can generally qualify for bonds up to $500,000.
The Benefits of Subcontractor Default Insurance for General Contractors
Subcontractor Default Insurance (SDI) protects general contractors from financial loss when a subcontractor fails to fulfill their contractual obligations. That failure on the subcontractor’s part can include inability to staff the project, delivering defective work, cash flow problems, bankruptcy, and more.
How to Deal with a Recession and a Hardening Surety Market
The Great Recession ended in 2009. Absent the whipsaw economic data caused by the reaction to COVID-19 in 2020, the United States has not experienced
Why a Surety Bond Is Better Than a Letter of Credit
Recently, I met with several successful business owners who are proud to say that they provide letters of credit in lieu of surety bonds for
Tips for General Contractors: How to Secure Your First Surety Bond
Surety bond underwriters want to say yes. Hard to believe, right? But the fact of the matter is that surety companies are in the business
