If you have hired a contractor to construct a building for you, then you are most likely looking forward to completion—assuming that everything goes as planned. But problems can and do happen; if the company you’ve hired goes into bankruptcy or some kind of accident occurs, it’s possible that your project will never be finished. All the money that you’ve invested up to that point might be wasted, and to add insult to injury you won’t be able to use the building. Surety bonds performance and payment plans help ensure that either this doesn’t happen, or that you’ll be protected if it does.
A surety bond is an agreement that guarantees a certain task will be completed. The buyer agrees to purchase the bond, and the insurance provider agrees to ensure the contractors will complete their work. If the provider is unable to get the construction company to finish the project, then they compensate the client for the investment that they’ve made.
Reasons to Purchase
Should you consider getting a bond? It’s probably a good idea to purchase a bond if you doubt for any reason that the contractor will be unable to finish their work. This might be the case if the construction company seems to be financially unsound, or if your property is subject to certain issues like natural disasters that can put a stop to the work. Surety bonds performance and payment plans are common for most large projects because of the protection they provide.