Surety Bonds: Why They are a Useful Tool in Construction Industry?

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A surety bond is a guarantee provided by the surety to the obligee (project owner) that the principal (contractor) will complete the job as per the terms of the contract. There are many operational benefits of surety bonds for contractors. These include-

  • Obtaining a surety bond means contractors have been judged capable of fulfilling the obligations of the contract. This can go a long way when it comes to enhancing their reputation in the industry.
  • Banks can put restrictions on submitting tenders. A surety bond allows the contractor freedom to submit tenders.
  • As the financial status of the contractor has been assessed by the surety (an independent third party), the bids of the contractor are viewed more favorably.
  • The financial, technical and management assistance provided by the surety can go a long way when it comes to completing the project on time.

Also, the premiums payable for surety bonds are more competitive when compared to bank guarantees. With all these advantages, surety bonds are considered essential for contractors and are a critical tool in construction industry.

Surety Bonds: Everything You Need to Know

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A surety bond is a contract. It is an agreement in which a surety company assures a project will be completed according to contract. If you are a contractor bidding for a construction project, this infographic will help you understand exactly what a surety bond is. It also shows why there is a need for surety bonds, and how they benefit contractors.

Surety bonds involve three parties: the surety company, the project owner, and the contractor. Whether a contract is for federal construction or the private sector, contractors must obtain surety bonds before bidding for a particular construction project. Contractors can obtain surety bonds from a surety company after undergoing a thorough pre-qualification process. A surety assesses the financial strength, business operations, and other qualifications before issuing a surety bond to a contractor. Surety bonds not only minimize the risk of contract default, but also increase a contractor’s project opportunities. However, there are different types of surety bonds used in the construction industry. See the below infographic to learn about the types of surety bonds your business needs.

Surety Bonds

Nielson, Hoover & Company Launches New App For Iphone Making Its Popular Bond Request App Even More Mobile

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August 12, 2015 Miami, FL – Nielson, Hoover & Company, Inc. is proud to announce that it has taken its highly successful iPad app, “#1 Bond Request”, that was introduced last year, and adapted it for the iPhone. This quick and easy mobile application is free and available now for download on iTunes. With over 700 million iPhones sold since its introduction, this unique app is a simple and convenient way to submit a bond request on this very popular mobile platform from any location at any time.

“The app was working so well on the iPad and with the number of iPhone users, it was only natural to offer our customers the ease of accessing it from their iPhones as well,” said David Hoover, President of Nielson, Hoover & Company, Inc. “With the addition of this iPhone app, we hope to provide the only resource people will need to request a bond,” he continued. The app allows people to remotely request a Bid or Performance and Payment Bonds and was designed with several exclusive features including the ability to store user information, saving time and effort for those who may need to submit multiple bond requests by eliminating the need to have to re-enter basic information needed for each bond request including bid amount, duration, retainage, bid bond percentage, etc. In addition, Nielson has enhanced the integration with the iOS camera so photos can be instantly uploaded, eliminating the need to scan and attach documents for bond requests.

Once a bond request is submitted, an experienced Nielson, Hoover & Company’s surety specialist will prepare it and send to you. If you are a prospect and not a current NHC client, they will analyze your request and provide the most effective strategy to help maximize your surety credit. Nielson, Hoover & Company has established themselves as the nation’s number one provider of surety bonds and continues to work hard every day to maintain that leader position. They have the expertise and ability to help companies attain the maximum bonding capacity, best rates and most favorable terms and conditions.

The “#1 Bond Request” iPhone app is free and available at ( You can also visit Nielson, Hoover & Company’s website at to obtain a request form or you can submit the request electronically through Nielson, Hoover & Company’s website should your needs change.

About Nielson, Hoover & Company, Inc.

Nielson, Hoover & Company is America’s number one provider of surety bonds. They bond more projects than any other agency. Throughout the years, NHC has developed a deep understanding of the surety industry. This knowledge allows them to provide superior services and a comprehensive solutions way to maximize your bonding capacity with the best terms and conditions. They have the capacity and experience it takes to support the largest national contractors and the hometown knowledge and personal service to ensure mid and small size contractors receive the same attention and expertise. NHC does business with over fifty sureties which ensures you will be matched with the surety that is best for your particular need. As your needs change, they have the market that will best match your changing needs. Whether you are outgrowing your existing relationship, or have gone through some difficult times, they can help you.

Nielson, Hoover & Company is the largest independent surety agency in the South East with offices in Miami, Palm Beach, Orlando, Tampa, Atlanta, Savannah, Charlotte, and Asheville. They have an extensive network of more than 20 experienced surety bond specialists. Their producers average over 20 years each in the industry with their customer service representatives averaging nearly 15 years.

To learn more about how Nielson, Hoover & Company can help you obtain the best rates and most favorable terms and conditions, please visit or call 305.722.2663.

The Benefits of Surety Bonds for Contractors

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Surety bonds play a very important role in construction and are often required in many situations. A surety bond is a guarantee that the job will be completed as per the terms of the contract. In a surety bond, there are three parties- the obligee (project owner), the principal (contractor) and the surety (who assures that the task will be completed per the terms of the agreement).

Surety bonds offer numerous advantages over traditional bank guarantees. Contractors, sub-contractors, roofers, electricians and other laborers can enjoy many unique benefits. These include-

  • Surety bonds improve the reputation of the contractors as they’re considered capable of completing the project.
  • For surety bonds, no tangible security is required. As a result, contractors are free to use their assets for business growth and procurement of additional working capital.
  • A surety bond company can offer technical and financial assistance to the contractor. This significantly increases the chances of successful completion of the project.
  • Also, instead of paying for the whole facility, contractors are required to pay only for the bond limits used.

For these reasons, it is important for every contractor to obtain a surety bond that meets its specific needs and requirements of each project they undertake.