The confusion between surety companies and insurance agencies is common. While they have their similarities, there are distinct differences between the two, such as their structure, their timelines, and their terms and conditions. Surety bonds are most common in the manufacturing and construction industries.As a requirement, the contractor must find a surety company to issue them a surety bond that will protect the project owner if the contractor does not fulfil their terms of the contract.
How to choose the right surety bond company
Not every surety company will have the resources to issue a bond for certain projects. Similarly, others may not have feasible terms and conditions to suit every contractor’s needs. If you are a contractor and looking for the right surety company to issue your bond, keep these tips in mind when making sure they are right for you:
- The company should have experience in handling surety bond contracts like yours
- The company must be able to prove that they will have the available funds instantly, if needed
- The company should have reasonable terms and conditions
- The company should be flexible to negotiate some terms without compromising the contract’s guidelines
- The company should have a clear and reasonablepayback plan for the contractor if they happen to default