The Benefits of Contractor Bonds

A contractor bond is very important. So if you plan to get one, there are certain things you need to know about a contractor bond. In addition to the fact that it is the law, here are some reasons why every contractor needs a contractor’s bond. Below are the benefits of contractor bonds.

Avoids License Suspension

If the contractor license board does not receive a notice, they can be able to suspend the license. They have the right to suspend your companies license. Without a license, it is very unlikely that you will be hired, and if you are hired, you will most likely be required to work without a license, which will be a significant cost to the CSLB.

Attracts More Customers

If you have a bond, many people or customers will likely want to work with you. If you’re not sure about the size and type of bond you need, talk to a bonding specialist today to learn more. You can get construction bonds from the most experienced bonding companies at a third of the usual premium.

This can help you gain more trust with your customer. In fact, many contractors have said that this has helped them make things easier.

Promotes Sound Surety

Due to human error, defective materials, or inclement weather, a surety company’s claims can be filed by anyone who has been harmed by an intentional or willful breach of a construction contract. So, even if you are not responsible or it was not intentional, someone can file a claim against your company. In this case, the insurance company with whom you filed the builder’s bond will pay the claim.

Since the builder’s bond is not really insurance, you must pay the bonding company any amount paid on your behalf, even if a claim is settled. Experienced insurance companies will protect you from false, inaccurate, or fraudulent claims. For this reason, it is crucial to find a very reliable and specialized bonding company for your contractor bond. The more experience they have fighting maintenance claims, the less likely you are to have to pay a claim every day and the more protected your business will be.