When looking into bonds and what type you may need you will find a wide variety out there. At times it is overwhelming and confusing. If you’re dealing with surety bonds you must understand the type and what they are used for. Gaining that knowledge before you need it will help you to avoid costly mistakes down the road. Here are a few samples of the types of surety bond available and why you might need them.
One type of bond is called a permit or licensing bond. You might see these when dealing with electricians, plumbers or contractors in general. These are great to have when working with these people on your new building or home. A good example of this type of bond would be if you are an electrician in your town. Some licensing requirements mandate you have a bond when you are work as an electrician. If so you can talk with your insurance agency about obtaining one and getting their requirements for the bond to be written.
Another popular type of bond is called the Contract Performance Bond. That one is simply what it states. This bond will guarantee the performance promised from a contract. The terms and conditions in the contract will dictate what is to happen but it will guarantee it happens as those conditions state. This is one that most often you will see with contractors or those who promise to do a job for you. These bonds help you to know that the work is done according to agreed upon terms. You may also see a type of Contract Bond called a Bid Bond. Another type is the Payment Bond which guarantees payment those doing the work, suppliers and any subcontractors that might work on the project.
Finally, one other type you may run into is the Public Official Bond. You see this bond in people that are appointed to office like treasurers, judges, notaries and those who issue fishing and hunting licenses to the public. These bonds guarantee that the persons appointed do the job they were assigned to to the best of their ability. Not every public agent you run into will have one of these but there are certain positions that do require them.
If you’re considering construction work or any other type of work related then surety bonds are a definite must for you. Not only do they protect your clients but they can protect you as well.
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