Do you know what a surety bond is? If you’re a contractor, it’s important that you understand the importance of this valuable coverage. Even the most professional contractors can have situations arise in which they cannot finish a job as promised. If this occurs, the client can take legal action to recover losses, which could mean a mess for your business.
The best way to determine the right bond(s) for your business is to contact an independent insurance agent. But in the meantime, we’ve listed three of the most common surety bonds for you to consider.
1. Contract Surety Bonds
· Bid bond: Guarantees that the bidding contractor who is awarded the project will obtain a performance bond and begin work in a timely manner.
· Performance bond: Guarantees that if a contractor doesn’t perform according to the contract, the client can be compensated for financial loss.
· Payment bond: Guarantees the payment of sub-contractors and suppliers for their work on the project. This is often issued with performance bonds.
2. Commercial Surety Bonds
· Sales tax bond: Guarantees that the bonded business will turn all collected sales tax over to the state government.
· License bond: Guarantees that the bonded business will obtain any necessary licenses or permits to meet city, county or state requirements.
· Auto dealer bond: Guarantees that a motor vehicle dealer is licensed to legally sell vehicles for profit.
3. Fidelity Surety Bonds
Guarantees that your business is protected from fraudulent and/or dishonest employees, including internal theft and embezzlement.
We’ve got you covered. Call Prestige Insurance Group at (305) 969-8776 for more information on Miami surety bonds.