Minimizing Risk on Construction Projects
When a contractor bids on big project, he may be expected to provide a Performance Surety Bond if awarded the bid. Should there be any issues with the project, the surety bond holds the contractor financially responsible.
This can be a huge risk for contractors who would be held responsible for the work his subcontractors. He may need to protect himself from unforeseen issues with subcontractors who may not perform as needed.
While the project owners want to protect themselves by requiring a contractor to be bonded, the contractor may in turn require his subcontractors to be bonded for his own protection.
A subcontractor Performance Bond benefits a contractor by:
- The subcontractor assumes part of the risk of the project. If the subcontractor fails to perform, then the contractor can make a claim on their bond.
- A subcontractor with a surety bond means there is a higher chance of success with the project due to the surety company analyzing the subcontractor’s risk before agreeing to issue the bond. Risk factors can include the subcontractor’s financial situation, work background, character, and other variables.
- A contractor who has bonded subcontractors may have a better chance at winning a construction bid.
- If a subcontractor is at fault, the surety may complete the subcontract or obtain a bid for completing the contract.
What Will This Bond Cost?
The premium you pay for a Subcontractor Surety Bond depends on the bond amount and other factors such as your business and personal financials and years of experience. SuretyGroup.com is dedicated to helping you save money, and offers free quotes based on your specific situation. Contact our Surety Bond Specialists to get started. Email email@example.com or call 844-432-6637.
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