Surety & Bonds

If you are a contractor (of any industry), you’ll promise clients that you’ll finish their work according to their stipulations. Contracts are not stipulations to take lightly. They are legally-binding. Yet, you can’t eliminate the possibility that a project will go awry. If you fail to honor your obligations, what can you do? Many businesses turn to Surety Bonds to help in case of project defaults.

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Surety bonds fall under the umbrella of consumer protection. They function like an insurance policy.

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If you make a contract with a client, a surety bond functions as a guarantee that you will do the work accordingly. If you fail to follow or complete a contract, the client can file a claim against the bond. Therefore, they’ll be able to recoup some of the money lost by the failure of the project.

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With insurance, the insurance company pays a settlement on your behalf. Under a bond, however, you must pay the settlement to the affected customer. Therefore, the bond functions like a guarantee that you will cover the customer’s losses in case of a problem on your end. It tells your clients that you have the financial backing behind you to do their work appropriately.

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