If you are entering into the contractor’s business, the first thing you must do is start looking for suitable contractors bonding and the insurance companies. Contractors typically require a number of bonds before starting with a project. These include license and permit bond, bid bond, performance bond, and payment bond.
Why you need the right surety company?
Reputation: When you select a surety, you should go with a reliable and reputable name. Remember, the surety will also represent you. Any obligee will trust a bond that comes from a well-known reputable company. The obligee will have the assurance that the surety is thorough in its investigation and hence, your bond will be deemed more reliable.
Support: A surety also acts as your protection if a dispute does arise. A good surety company will investigate a claim thoroughly and agree to pay up only if the claim is seen as legitimate. The more is their commitment to a fair investigation, the better are your chances. The surety becomes your support in this case.
How to pick a surety company?
You can follow the following steps when picking a contractors bonding and insurance company:
Research: You can check the top companies online. You can also ask your peers or others in the industry for reference. Check their website thoroughly, especially their procedures and bonding conditions. If you have a low credit score, check that the company will still consider your application. If they do, check their conditions.
Cost comparison: Do a cost comparison between different surety companies to find the one that fits your budget. You can ask for a quote. Some companies offer this service for free, while some will charge a nominal fee. Instead of going with the cheapest, find out the standard cost.
Fill the form: Fill the form on the website and submit it. You may also have to attach certain documents or send these by mail. You may also be asked to submit these when the application is approved. Once you’ve filled the application, the contractors bonding and insurance company underwriter will evaluate it and fix a cost.
Finally, you may have to sign an indemnity agreement and pay the fee to buy the bond.