Construction Surety Bonds and Why They Matter
This post is particularly concerned with giving a highlight on all that may be there about the facts on construction surety bonds and is particularly benefit the contractors who are new to surety bonding and public bidding. To learn more about Construction Surety Bonds, visit www.pomsassoc.com/risk-consultants
. The fact is that there are a number of the surety bonds but we have a particular focus on the construction surety bonds which are basically the kinds of bonds that you will need as a contractor when you will be bidding for public contracts.
Basically a construction surety bond is a tri-party contract which will provide the assurance to the end that the construction project will be accomplished within the provisions of the construction contract. The key parties, if you may ask, are such as; the contractor, the party owning the project and the surety company. The surety company comes in and plays such a significant role in the project as they will get the project owner the assurance that should the contractor fail to perform their part as in the contract, they will get in and ensure that the project is completed at least up to the face value of the bond. The face value is basically an equal of the currency value of the contract. To get more info about Construction Surety Bonds, click construction insurance agency
. The surety has a number of remedies they may employ to have the project completed for them to employ such as hiring another contractor to complete the project, financially stepping in and supporting the defaulting contractor to have the project completed or getting to reimburse the project owner the agreed amount which is in most cases up to the agreed amount of the contract face value or the bond value.
If you are a contractor, then you need to know that there are basically three kinds of surety bonds. These are such as the bid bond, the performance bond and the payment bond. The bid bond is often submitted with the bid and will guarantee the project owner that you will provide them with the payment bond if you happen to be the lowest possible bidding contractor. If you happen to win the bid, you will then need to follow it up with a submission of the payment and the performance bonds. The performance bond will just do as we have highlighted above, guarantee the project owner the assurance that you there will be a commitment on your part as the contractor to perform the project as is stipulated. The payment bond particularly guarantees that you as the contractor of the prime position in the project will be undertaking the responsibility of paying your sub contractors and the suppliers as per the contracts they have with you. Learn more from https://en.wikipedia.org/wiki/Construction_Surety_Bonds