Below are several of the advantages to purchasing surety bonds.
Any construction contract company holding a surety bond has increased credibility as qualifying for a bond demonstrates the company’s professional stability.
A surety bond binds the contractor with the surety, which gives the contractor access to professional advice from lawyers, accountants, engineers and other professionals.
Bonding also offers a protection to the contractor in the event of a dispute with the obligee.
Due to increased leverage, a contractor can submit more tenders, which leads to additional contracts and revenues.
These are some of the benefits of surety bonds for contractors. Moreover, surety bonds are advantageous to the obligee in many ways as well.
Surety bonds guarantee the obligee the lowest compliant bidder will perform the work for the quoted price.
It assures the work will be completed as per the contract.
Obligees are ensured suppliers will be paid regardless of financial difficulty at the contractor’s end.
Surety bonds guarantee any loss will be settled by the bonding company in the event of the contractor’s inability to take up any unexpected cost overruns.
Obligees can be assured the contractor has the financial capacity to withstand the risks involved in the construction business.