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Prestige Insurance Group, Inc.

Handshake Agreement for ContractorsIf you are a contractor, you likely have to go through an interview process, called a pitch. Many clients require a vetting process before they award a contract. Vetting helps clients decide which contractors offer the best work at the lowest risk.

When pitching before a client, you get to explain why your company is the best option for a job. If selected for a contract, you can enter into a profitable endeavor with the client. However, you'll need to ensure that you protect both yourself and your potential clients. If a client awards a contract improperly, then losses could affect both parties in the deal.

Keep special considerations in mind when pitching and negotiating a contract.

Bond Requirements

Many contracting clients require contractors to carry surety bonds. Bonds are like insurance. They reassure clients that you can compensate them for lost costs in the event you can't honor the contract.

If you can't complete the contract, a bond will issue a payout. However, you have to reimburse the bond company for that payout. That's why you have to have the correct assets in place before accepting a bond.

Ask a client if they have bond requirements for a project. Understanding a bond rule will help you know if you can complete a project, or afford to pay if otherwise.

Timeline and Cost

How does a client expect you to complete a project? Do you have the ability to complete a project on time? Can you meet the client's budget? Make sure a contract enumerates these unique figures. Therefore, there won't be any question left unanswered.

If you can't meet contractual expectations, this might lead to cost overruns and other risks. Don't accept a contract if you cannot reasonably deliver. You might face a bond claim if you don't follow a contract to the letter.

Will You Negotiate?

Ask a client if they are willing to negotiate the terms of a contract in the event of potential conflicts.

Have your lawyers review the contracts for any possible risks. You may ask your clients to change certain costs, timelines or other figures in the contract if you feel the stipulations of the contract are unfeasible. If your client is willing to negotiate, this can help both parties avoid problems. If a client won't negotiate potential changes, then you might be safer refusing a contract.

Negotiation will help you protect your assets. An open dialogue can reduce your liability risks when you begin a contract.

Prestige Insurance Group, Inc. can help you get the coverage you need. Call us at (888) 969-8778 for a no-obligation quote on bonds.
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