Surety bonds are good things to have as a contractor, and in fact are a MUST have in some cases. There are many jobs out there that a contractor cannot even bid on if they do not have a surety bond in place. Both large companies and government jobs many times require a surety bond. This makes a surety bond equal right up there with a business plan when it comes to things you need to succeed.
Surety bonds are built to protect the consumer in the event that a contractor does not do what they said they would do. What happens in this instance is that the surety bond company is contacted by the client, and the surety bond company either pays the client for the incomplete work or hires a contractor to finish it. In this way, it is easy for a client to confuse a surety bond company with insurance. They are not the same.
Surety bonds, also called contractor bonds or performance bonds, are as old as business. The oldest known surety bonds go back almost three thousand years. This is how long there has been fear and uncertainty in the business process. For as long as there have been surety bonds, they have been difficult to get. That is changing, however. Some surety bond companies are putting their requirements online and making that access much easier for contractors. The actual delivery of the surety bond comes in the email.
Surety bonds, or performance bonds, also sometimes called contractor bonds, are instruments of security that can sometimes be confused with insurance, but are very different in a couple of key areas. Where insurance pays a person based on damage, surety bonds or performance bonds are designed to pay a client or customer if “performance” is not achieved. This can take on may forms, from incomplete work to the work never having been started after a deposit is taken. This kind of security instrument is designed to make “sure” the client that the contractor will “perform” the desired service that is contractually agreed on, thus the different names. There are some differences, but overall they are very similar. It is all built around making sure the client gets what they pay for.
Surety bonds are required in many instances, either by the company seeking the bids or the government in that particular area, or even federally. You don’t want to be in a position of not being able to get a surety bond if it is required to be able to offer your service. That is a bad position to be in. Now, one key way surety bonds differ from insurance is that in normal cases the companies offering them will require a credit check, since they function much more like a line of credit than a insurance policy. This puts a lot of business owners in a precarious position. There is hope, though.
When you buy your surety bond, and especially a high risk surety bond, you have to make sure all your bases are covered. What happens if you make the wrong decision? Bad things, that’s what. You can find yourself in a position where you are not protected. Worse, you will find this out at the worst point possible; when you need the protection that you thought you had put in place all along. There can’t be many worse feeling in the world. How can you avoid this? How can you make sure that all you have worked for does not get flushed down the drain? Read on, I’ll explain two blunders you can skip past.
First, Do your research. High risk surety bonds are set up so that people that might have had a rough time with their credit can still get access to the est job bids out there. If this sounds like you, then you should look at high risk surety bonds. Just don’t sign up with the first surety bond company that comes along. Make sure you’ve done your research.
Second, have a plan. You don’t want to have to use high risk surety bonds, with their attendant higher cost, for the rest of your life. Have a plan to get yourself out of the ranks of the bad credit, and get it back on track so that you can buy normal surety bonds.
If you are a home builder, a builders risk insurance policy can be taken out during the duration of a building project, whether professional or personal. There are several types of policies that can be taken out that may fit your building schedule. Single shot, monthly rate, annual rate, and annual deposit are all included in a policy option. This article is geared to inform you about the single shot policy.
The single shot builder’s risk policy is intended more for builders who will only build a couple or few buildings within a year. The policy does not target the project as a whole, rather it targets each individual house or building. The policy will have a minimum premium which can range up to $400 dollars. If the building is finished before the policy is finished, no refund is issued. All the information of the building site must be given before the policy goes into effect. Information consists of things such as how many square feet, where the building is located, and construction itself. Since there is so much information, paper work, and communication needed in between builds; this policy is not recommended for those who build more than five or six homes a year.
You should always know the pros and cons of your policy before you purchase it. Make sure you ask your contractor insurance agent all the questions necessary about things such as theft, weather damage, and vandalism.
When you own a small business in America, you need the strength that a surety bond gives you. There are tons of ways a surety bond gives your company more strength, but I want to talk about just a couple today. More on that in a second, but first, let’s examine just how a surety bond actually works. Many people confuse surety bonds with general liability insurance, and that is not that hard to do. They both cover loss, and they both are very affordable. The difference is that insurance is much more limited in the manner and scope of coverage. Surety bonds have many different forms (contractor bonds, dishonesty bonds, high risk surety bonds, etc…), and thus can cover some very narrowly defined areas of risk for a small business. They work by you purchasing the bond, then if you incur the liability, the surety bond company pays it out, then you pay them back. Very simple, right? So now let’s look at the two ways a surety bond strengthens your company.
First, you are stronger because you are protected. Being protected against loss is important, and not to be overstated. You are able to focus more on things that matter in every day business if you know that your liabilities are covered.
Second, your company is stronger because it is more flexible. See, surety bonds give you access to different kinds of bids, so your company can make more money.
Bad credit can put you in a position where you need high risk surety bonds, but you fear the name. Think about it: high risk? Really? Who would ever want a bond called a high risk surety bond? This is a common thought, and one that could be keeping you from the kind of freedom and income you have been looking for. See, bad credit affects everything you do, and can do. It really is limiting, but perhaps nowhere is it as limiting as in the area of surety bonds. Why? Because, once you have bad credit, you can’t get a standard surety bond. Because the surety bond company has to depend on you paying the bond back, your credit history matters. So once you have bad credit, you are shut out of the good jobs that require a bond. So let’s look at two ways to tell if they are for you or not.
First, if you have bad credit but want to one day have good credit again. This sounds counter intuitive, but high risk surety bonds can be your path to getting back to standard surety bonds one day. By allowing you to bid on work again, they put you in a good position.
Second, if you have bad credit and still want access to the best jobs. See, the companies you bid for don’t discriminate between surety bonds. If you have one, you get the bid.
Janitorial bonds are a part of life for many small business owners, but if you are not familiar with them, you would not know about what all they migh tbe able to do for you and your business. However, there are many benefits you get from janitorial bonds, and some you might be shocked by. For this reason, you need to know all you can about them. I am providing a starting place today with just a couple that you really should know about. , but do some research on your own and learn what you can. For now, let’s get started on these two.
First, you get tailored, specific protection that you can’t get from any other source. See, janitorial bonds are designed for only one kind of business, and that is a business with a cleaning emphasis such as a office or home cleaning company. This kind of company has a severe exposure because of the fact that their employees have access to valuables. When those are stolen, you need protection. Janitorial bonds give it to you.
Second, peace of mind. This might surprise you, but that’s only if you have the tunnel vision that comes from concentrating only on the nuts and boltsof the janitorial bonds process. Think about all the worrying you won’t have to do once you have the right bond in place. That’s the hidden benefit that you can expect.
What is a janitorial bond? how does it work? How do you know if it is the right thing for your business? There are many benefits that come along with these kinds of bonds, and you have to make sure that you have all your ducks in a row so that you are not setting yourself up wrong. I want to talk to you about a couple of unusual facts that make a janitorial bond what it is. While there are more, we will just talk about two. Let me explain.
First, janitorial bonds are not for just any contractor. In fact, if you want to waste some money, it is really easy to do if you buy a janitorial bond if you are not the right kind of contractor. See, you can only use a janitorial bond if you have a cleaning business. That is what they are made for. If you don’t own a cleaning business, they won’t help you at all, which is unusual with surety bonds.
Second, janitorial bonds are unusually inflexible. You absolutely can not use a janitorial bond if you do not have a cleaning business. Most surety bonds are able to be used across a variety of applications, but not these. If you end up needing protection, and try to use this bond when it is not designed for your needs, you are out of luck. If you find the right bond, though, you are good.
Contractor bonds are one of the most useful and versatile surety bonds there are, and especially for those of you who are contractors offering services to homeowners. The reason for this is simple. If you are offering services to homeowners, you face a different level of liability than other contractors. See, homeowners are very picky, and will have a lot more emotionally invested in the projects you will be doing for them. This means that the complexity o fevery job you have goes up, and so does your liability. You need protection. Contractor bonds can give it to you. Read on, I’ll explain two hidden tricks you can use to make sure that you have found the right contractor bond to protect you and your business.
First, investigation. This might sound shocking, but most people don’t investigate enough when they make their decision on which surety bond companies to hire. By hiring the first one they find, they rob themselves of better pricing or even competent help. Don’t let this be you. Dig in, and find the best company for your business.
Second, comparative shopping. This takes a little more than you might expect. You need to combine your investigation with some persistence in pressing through several different companies so that you have enough information to hire the right surety bond company for your contractor bond. THis ensures that you are making the right choice and will not be found lacking.
If you own your own business, you probably are just now becoming aware of all the different types of surety bonds that are available to you, and you might be a little overwhelmed by that array of choices. If you are not careful, you can even pick the wrong one. With standard surety bonds, high risk surety bonds, janitorial bonds, contractor bonds, just to name a few, it can make choosing the right one tough. This can have some serious consequences for your business, and you don’t want that. How can you make sure you get the right bond for your business? I have a couple of thoughts for you to keep in mind. I think they will help you make sure your business is covered correctly. Let me explain.
First, hire the right surety bond company. Especially if you are new to surety bonds, you are going to be totally dependent on the honesty and competency of that surety bond agent to get you the right bond. If you hire the wrong one, then you are at risk to make the wrong purchase decision for your business.
Second, understand the connection of your business type with the type of surety bond you will get. While there are general surety bonds that will work for any business, there are some that only work for specific types of businesses. Your business might be one of those, and you need to make sure you’re covered.