Three Benefits Of Getting A Contractor Bond

Contractor bonds, also called surety bonds, assurance bonds, and performance bonds, are vital to both the contractor and the consumer. There are some major risks on both sides if you do not have a contractor bond. There are also some major benefits, as you will see:

You Have Assurance That the Project Is Yours

These bonds are often referred to as "assurance bonds" because as a contractor, they assure you that the project with a specific consumer is yours to complete. This is important because you need to know that you will have a steady income from a project and that your crew will be paid on time. Without this bond, the consumer could back out and hire another contractor, and then you would be out all of the money you expected for the job.

You Are Assured That the Project Will Be Completed on Time

As a consumer who wants something built, you want to know when it will be complete. Whether it is your dream house or a city bridge, it is important to get a promised deadline for execution and completion. The contractor bond bonds the contractor to an agreement that the project will be completed by an exact date. If the contractor fails to meet the deadline, there are statutes in place that allow you to sue, or prevent you from having to pay more money above and beyond what you expected or were told to pay.

It Safeguards Both Consumer and Contractor Against Fraud

Nobody likes to think that a consumer or a contractor would ever rip off the other. Yet, it does happen. A contractor bond ensures both parties against fraud and against loss of time and money. This vital contractual bond does not seem like much when you see it in person, but it has an immense amount of legal power against any party who reneges on any part of the job or payment for services rendered.

Avoid Hiring Anyone Who Does Not Have or Acquire a Contractor Bond

If you need to hire any sort of construction contractor for any reason, make sure that he/she is able to acquire, and/or has, a contractor bond for the job. If there is no contractor bond, or the contractor refuses to get one, do not hire him/her. The potential ramifications of hiring a contractor without a contractor bond simply are not worth it.   

Contact a contractor bond agency near you for more information and assistance.