Benefits of Bonding


How will a surety bond benefit you?

  • Surety credit (an established bond line) can increase a contractor's (or subcontractors) project opportunities.  With each completed bonded project, the contractor's capacity grows.
  • Surety bond producers and Sureties want the contractor to succeed!  Your bond producer, or underwriter can offer technical, financial, or management assistance to achieve the growth desired.
  • Owners view bonded contractors as more capable than unbonded contractors. Owners know the contractor has undergone rigorous prequalification processing and the Surety deems them capable of fulfilling the obligations of the project.
  • In the event of a default on a bonded project, the surety will fulfill the contract.  It will conduct an impartial investigation prior to settling any claim.  This protects the contractor's ability to pursue legal recourse in the event that the owner improperly declares the contractor in default.  When there is proper default, the surety may have the option to provide financial and /or technical assistance to the contractor, bring in a replacement contractor, re-bid the job for completion, or pay the penal sum of the bond.  Compare that to a claim made to a financial institution who issues a letter of credit.  In addition to the letter of credit hindering the use of working capitol, when an owner presents a letter of credit for payment, it is the duty of the financial institution to pay.  There is no investigation process, no legal recourse for the contractor.

For all these reasons, Contract surety bonds are a wise investment!


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