 Surety bonds are safety nets. They helps protect a business in case another business or person cannot fulfill a contact obligation; in that case, the surety bond pays the business the money they were promised in the contract.
There are four types of surety bonds:
- Bid Bond: This bond ensures the construction company that is bidding will enter the contract if awarded and will furnish all required payments and paperwork.
- Payment Bond: This bond ensures the construction company will pay the supplies and subcontractors.
- Performance Bond: This bond ensures the construction company will complete all the terms and conditions of the contract.
- Ancillary Bond: This bond ensures that requirements integral to the contract, but not directly performance related, are performed.
Basically, a surety bond insures that a construction company will do the work that was agreed to. If the work isn't done, the bond kicks in to pay that business for the work that wasn't completed.
With the multiple types of surety bonds out there, it's important to know which one is best for your situation and your business. That's where we can help. Knowing about surety bonds can help give your business a more professional look and give you some more validity.
Cover your construction project. Call Southwest Commercial Insurance at (512) 771-6091 for more information on Austin surety bonds.
Posted Tuesday, April 07 2015 7:45 AM
Tags : surety bonds, coverage, insurance, agreements, work, Austin, Texas, Austin TX insurance
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