Tag: Insurances

Surety Bonds and Insurances: Are They the Same?

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...

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By M L

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Is there a Difference Between Surety Bonds and Insurances?

Have you been told that a surety bond is the same as insurance?  Or that insurance is better than a surety bond in the field of construction?  There are contractors, who feel, that construction bonds are not necessary in order for their business to succeed.  Unfortunately, these are often the same contractors who do not see as much business growth as bonded contractors.  All public construction projects required surety bonds.  Since the public construction sector is a reliable industry it is an industry worth working in.  In addition, in recent years, many private sector construction jobs have also began to require surety bonds. What are the main characteristics of insurances and surety bonds? First, we would like to debunk the myth that bonds and insurances are the same thing.  Many people assume, incorrectly, that the term “bonded” and “insured” are interchangeable.  In the case of the contractor, an insurance policy usually refers to liability insurance or workers’ compensation.  They do not protect the project owner, but rather the workers.  For many clients, hearing that a contractor is also bonded, gives the project owner confidence that they will be protected, in the case that the contract is not satisfactorily completed....

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By M L

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