manavpietro's blog

This info-graphic titled ‘Contractor Surety Bonds — All You Need to Know’ provides us an overview of importance of contract surety bonds. In the unfortunate event that a bonded contractor goes default, the surety has legitimate obligations to the project owner and the contractor. First, the owner must formally state the contractor in default.Then the surety company conducts an impartial investigation before settling up on any claim.This assists the contractor’s ability to pursue legal recourse in the circumstance that the owner improperly declares the contractor in default.

When there is a right default, the surety’s alternatives often are spelled out in the bond. These options consider the right to re-bid the job for completion, bring in a replacing contractor,
provide financial and/or specialized assistance to the existing contractor, or pay the penal amount of the bond.

The contractor regards the bond premium amount in the bid and the premium generally is payable upon execution of the surety. If the contract amount goes variable, the premium may be adjusted for the change in contract value. Contract surety bonds are always a wise investment, covering up for public owners, private owners, lenders, and premier contractors from the potentially devastating expense of contractor and subcontractor non-achievement. For more information, please refer to the info-graphic below.