No matter how hard you try, there are times when you just can’t finish a project. Professionally, not producing a promised product or completing a project could get you in a lot of trouble. Protect your reputation and company name by purchasing a surety business bond from an independent agent in the Trusted Choice® network.
Your Trusted Choice independent agent can customize coverage for your specific needs. Do you need a surety bond for one job or multiple jobs? Independent agents can compare a variety of policies to find the one that works best for you. Your agent can compare quotes to find a competitive rate. If you need a surety business bond to guarantee project completion, contact a Trusted Choice member agent specializing in commercial needs.
Many people think of surety bonds as "surety insurance." But they are not actually a form of insurance. Think of a surety bond as a line of credit. If you can’t complete a project, the project owner can then tap into that line of credit to finish the project as necessary. Surety business bonds are a three-party agreement. The three parties involved include:
Before the contractor can begin the job, the project owner may require a surety business bond from a surety company. Some projects will require a surety bond and others may not. Many federal projects or those that cost a certain amount will require a bond, which can be obtained in amounts high enough to cover the entire project.
Although surety bonds are common in the construction/contracting field, there are many types of bonds that serve many different purposes.
If you aren’t required to purchase a surety business bond, why would you? There are multiple ways surety bonds can benefit both parties. As the principal, obtaining a surety bond prior to working with a new project owner displays business integrity and financial stability. To get a surety bond, principals must apply and meet certain standards set by a surety company. Being rewarded with a surety bond from a top quality surety company is a testament to your business strength.
For a project owner, surety bonds can be a lifesaver. Even if a terrible tragedy prevents a principal from fulfilling a contract, the project must still be completed. Working with a principal that possesses a surety bond can provide peace of mind that, no matter what, your job will get done.
The costs involved in getting a surety business bond depend on several factors:
Depending on the amount of your bond, you can expect to pay anywhere from 1 to 3 percent of the total project cost. Of course, your financial status may raise or lower your total payment.
If you are the principal, and you don't have an excellent credit score, the surety company will most likely charge a higher premium because you represent a greater risk. Additionally, if you don't have a history of former projects, it could be more expensive to obtain a bond simply because the surety company has no previous experience to determine how much risk you represent.
Whether you’re required to obtain a surety business bond or are thinking about purchasing one to illustrate good faith business, a Trusted Choice member agent can help you find the one that works for you. Member agents have access to a wide range of insurance companies and surety providers, which means they can shop for the most affordable surety bonds.
If you’re ready to get started on a new project, contact a local independent agent for assistance finding the right bond for your needs.