It's that time of year when non-residential construction moves full tilt. If you are new construction, you have probably heard of bail, but perhaps you have never had to get one. Below, we'll talk about what they are and what is needed to acquire.
bonds usually require general contractors on public projects. Nowadays, more and more subcontractors find they must also provide links. A bond is an agreement under which one party (the deposit) warrants to the other (the owner or creditor) a third party (contractor) will complete a contract in accordance with the specifications agreed in the contract.
There are four common types of contract surety bonds:
- Bid Bond - provides a financial guarantee that the offer was made in good faith and that the contractor intends to conclude the contract to the best offer
- consent of the guarantor or surety agreement - .. guarantee that the performance and payment of necessary duties will be provided if the contractor is awarded the project
- Performance Bond - protects the creditor for the financial loss should the contractor fail to perform the contract under the terms and conditions of the contract
- Work & Material Bond of payment -. guarantee that the contractor will pay some bills subcontractors, labor and materials associated with the project.
most companies that issue bonds work through agents or brokers, so your first step in the acquisition of a bond is to discuss your plans with your representative. In general, the best qualified to help you get your link is a broker who specializes in surety bond. But keep in mind that the qualification for bonds is similar to getting a bank loan. As with any bank, a surety company must know before you make commitments. This process can take some time
The first step is information gathering and presentation of data to subscribers.
(1), the bonding company wants to verify that the contractor is of good character,
(2) has experience relevant to the project requirements and
(3) has (or can acquire) the necessary equipment for the project.
Second, they must ensure that the contractor has sound financial (usually established over three years of history.) This essentially means that he / she can support the project and has a history of entrepreneurs payers and providers (so if you do not pay your bills, you probably will not go beyond this point in the process!) Finally, they must also confirm that the contractor is in good time with other financial institutions .
the bottom-line.
"bail wants to be satisfied that the contractor is well managed, profitable company that holds promises, just how offers and fulfills obligations in time timely "[Source: Surety Association of Canada]
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