There are three parties involved in bonding: the Principal, the Obligee and the Surety. The Principal or contractor doing the work retains the risk. The bonds provide protection for the Owner of the project, or the Obligee, that the contract will be completed.

Premiums paid for bonds are actually "fees" to use the insurance company's financial assets to back your job. The bonds state that the contract will be completed and that the subs and materials used on the job will be paid. In the event they are not, the bond company may step in and take over the completion of the contract up to the amount of the bonds.

When you are asking for a bond you should expect to supply the following information that may apply to your specific situation: Fiscal Year End Financial Statements on your Business, Personal Year End Financial Statements, Copy of a Bank Line of Credit, Current Work on Hand Report, Contractor's Questionnaire giving information about your company, and a copy of the Contract to be bonded.

Email us at info@reithandassociates.com today to learn more.

<< Back to Menu