Lets get started with Surety Bonding
Canada’s construction industry has been brought back to life in past years. There are numerous individuals, who have become contractors and have managed to earn a good living from their work. Of course, being a Canadian construction contractor isn’t all fun and games. In fact, there are many responsibilities to manage and various hoops to jump through. One thing to take into account is the need for construction bonds. Anytime you decide to try and start a new project, you’ll find yourself needing a construction bond. Below, you’ll discover some about these bonds.
Why Are They Necessary?
As a contractor, you most certainly want to keep as much money in your wallet as possible. The need for various construction bonds can subtract from your earnings to some degree and you might not feel like this is fair. The truth of the matter is that bonds are made necessary for a reason. They’re there to prevent shady companies from acquiring the rights to construction jobs, while also protecting the groups and individuals that the contractor encounters.
Getting Started – The Bid
As a contractor, you likely already know all about the process of attempting to acquire a project. First, you’ll need to place your bid and wait for the developer to accept it. If you’ve proceeded through this process in the past, you’ll know that a bid bond is needed, before you can place your bid. The bid bond helps to provide the developer with the reassurance that you’ll acquire the other required bonds, if you are indeed selected for the project. The bond also prevents unreliable companies from placing a bid and fleeing the scene, after acquiring the job.
After you’ve managed to secure the job, you’ll need to next acquire a performance bond. The scope and purpose of the performance bond are truly massive. In fact, the bond goes a long way towards protecting the developer and helping to ensure that the project is completed in a satisfactory and timely manner. This surety bond simply ensures that the contractor will fulfill their end of the contract. If the contractor slips up or delays for too long, the project owner will be able to take action, by filing a complaint with the surety company.
Not all construction bonds are there to protect the project owner or developer. Some are put in place to add protection to the subcontractors, laborers, and suppliers. This is where the supply bond enters the picture. The supply bond, as the name implies, is there to protect any company, which provides materials and supplies for the project. If the contractor fails to pay the supplier within a reasonable amount of time, the supplier will be able to seek reimbursement, by filing a claim with the surety.
The maintenance bond isn’t always a requirement, but it can provide additional protection to the project owner. The maintenance bond expands the protection period for a specific time and protects against faults within the material, design or workmanship. If problems do arise, the project owner will be reimbursed for the defects.
At the end of the day, construction bonds are immensely important for all parties involved. Regardless of which side of the arrangement you’re on, you should make sure the appropriate bonds are put in place by a repudiated company (Which you can learn more about at Wesbite – http://www.ibc.ca/on/home) so you will be protected.