Surety Bond Insurance: What Is It and Why Is It Important?

Not everyone needs to have a building surety bond, however it does make good sense to invest in a surety bond to protect your personal assets when you are involved with a building project. Almost everyone in the commercial building business understands the importance of surety bonds in winning a bid or making a project work. Yet not all construction projects are alike. Each project will require a different method of securing surety bonds. The most important factor that must be addressed in every project is the process for obtaining surety bonds.

First, it’s important to know that any bonding agency that answers the phone wants to see a copy of your bond. Even if you are not sure what kind of bond you need there are surety agencies that can give you a free no obligation quote as to how much surety Bonding actually costs. Many bonding agencies also offer an online calculator to determine exactly how much bonding will cost you. If you don’t want to pay that much, some bonds can be performed for as little as a few dollars.

It is important to remember that federal surety bonds and most state surety bonds are required for commercial projects that involve people. While the requirements are often similar, far bonds vary from state to state. Check with your state star office to determine the specific requirements for the projects you have in mind. Check also the rules and regulations for commercial business surety bonds that you intend to use with your construction company.

Commercial construction projects that involve workers as the principal are subject to different permitting processes. A permit application form for fax bonds must be filed with the local board of construction regulation. Once the form is approved, the applicant must submit financial information as well as copies of other documents that prove the project’s financial, potential job benefits. The obligee, or the principal, is responsible for paying the necessary fees and submitting required forms.

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Nancy Fowler