In layman, easy-to-understand terms, surety bonds guarantee the performance of a written contract according to its terms and conditions. Surety bonds have nothing to do with investing, in the business context, they are like insurance – they uphold a promise to do something, the contract is breached and the surety pays off to ensure that the pledges in the promises are met.
Types Of Surety Bonds:
Bid Bonds, which guarantees that if a contractor is the chosen bidder on any given project, he will enter into a contract and provide a performance bid. A performance bond promises that agreements in the contract will be concluded according to the terms and conditions mentioned therein and the payment bond guarantees payment of laborers, subcontractors, and material suppliers.
How Much Does A Surety Bond Cost?
Bond costs differ significantly. It is reliant on the type of bond, the applicant’s credit history; his financial performance is taken under consideration and the place where the bond is needed. There is a variance in fees charged by different surety companies and all states don’t charge the same amount. The actual cost of the bond can really be calculated precisely by the surety companies.
Why Is It Mandatory To Buy A Surety Bond?
It is a compulsory requirement for many federal jobs, construction jobs or by the court. There are many industries where, in order to protect consumer rights, the government mandates having bonds. Many a time businesses licenses are not issued until the business get surety bonds. Before you buy make sure that you really need one – if you are unsure ask your bond agents.
Are Insurance Policies A Better Bet?
Certainly not, insurance guards against risk, whereas surety bonds safeguard in the event of an unforeseen failure of the principal. A bond is like credit- it only has to be paid if the principal fails to complete the contract. Moreover insurance costs more because the holder is also paying into a general fund that will cover the insurance company, if ever they have to press a claim.
How To Be Certain That You Are Getting The Right Bond At The Lowest Price?
Whenever you are out buying anything, you always want to make sure that you are getting the best bargain. Ai Surety Bonding is the best place to go to. They are leading bond agents and have maintained a model centered on customer needs. By answering all your queries they take the guesswork out of your buying. The company will ascertain all your individual requirements before recommending a bond, or if you really need it. They will make your bond experience an enjoyable and fruitful one and have a proven track record of better service than most other companies.
Does Applying for a Bond Cost Money?
None, the bond application and the quotation are free of charge. Some companies charge for application but at Ai Surety Bonding the application and quote don’t cost you a penny – moreover, they answer your queries to your utmost satisfaction.
Will Not Having Good Credit Hamper Your Chances Of Getting A Bond?
Getting a surety bond means that the company considers you to be financially reliable. Even if do not very good credit, you can still get the bonds, albeit at a higher premium, on the other hand, a good credit score means a lower bond fee. Good bonding companies share special rapport with surety companies, where they will place your bonds. The company’s reputation will act as your credit and substitute for your bad credit – all the more important that you chose a company of repute and standing.