Contract Surety Bonds for Construction Businesses

Bonds are a staple of risk management in construction because they’re structured in ways that are more cost efficient for the business than most insurance coverage. Of course, there are also areas where you need construction insurance instead of bonds, but those areas tend to be when you’re covering your own risks. Contract surety bonds, by contrast, provide protection for your customers in the event that there are problems with your ability to complete the contract in certain key ways.

Kinds of Construction Surety Bonds

Bonds can be customized to suit practically any contract provisions, but the major areas where most businesses request coverage include:

  • Bid bonds
  • Payment and subcontractor surety
  • Completion
  • Supply costs
  • Performance

Generally speaking, construction businesses will need all these types and more in the course of a lifetime, but they don’t necessarily need every one on every job. It depends on the size of the job, the risk exposure you face, and the role you play in the construction process.

Provide Peace of Mind To Customers

Since bonds are taken out on a job by job basis instead of providing the consistent coverage insurance does, they need to be quoted and bought as you land jobs. To show customers that you’re ready and able to get bonded, work with an agent that can provide bondability letters attesting to your ability to qualify for their contract surety bonds.

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