There are many who confuse surety bonds with insurances, as they are both a means to protect finances. But, in their execution of this goal, they serve different purposes. Confusing the two or using them interchangeably can stop your business from growing. In the world of construction, constructions projects may require a surety bond. With that in mind, the public construction sector is always building and is a good avenue for a contractor to grow their business. And even many private sector construction jobs require surety bonds. Having a knowledgeable surety bond producer can help you to grow your business. Consider them an important tool in your tool box. Here are some important things to know:
- A surety bond is a contractual agreement between the project owner or client, the contractor or business and the surety bond producer. The surety bond producer ensures that they have vetted the business and that they are financially sound. If the business owner does not fulfill the contractual obligations, then the client can file a claim. If found to be in default of the contract, the client will then receive financial compensation.
- Surety bonds and insurances are NOT the same thing. Therefore, when someone says they are insured, they do not have the protection of a surety bond. In the construction world, and insurance policy may refer to liability insurance or workers’ compensation. If a business is insured, it is the owner who is protected. If a business is bonded, the client is protected. In conclusion, being bonded gives the project owner or client peace of mind that they are financially protected.
- The strongest business is one that has insurance and a surety bond. It protects the business itself, and gives the client peace of mind that their financial integrity is also under protection.
Do you still have questions? Feel free to contact us as we have decades of knowledge in the surety bond field and some of the best relationships with underwriters in the industry. At Surety Bond Professionals, one of the things we pride ourselves on the most is our loyalty to our customers and our hard work ethic to make sure that our clients are fully protected and have the best chance at completing a job. We would be glad to offer you the same quality of service that have kept our customers coming back time and time again. Contact us today for any questions you may have, and let’s get started on assessing your surety bond needs.