When a property owner hires a contractor, plumber electrician etc. to perform a job, he or she wants to know that the work will be completed as promised and with a high level of professionalism. Surety bonds are designed to increase this level of trust and security between business and client. How?
A bond, in its simplest sense, is a guarantee that the job will be completed as expected. It allows the property owner to hold the bonded business accountable for its professional performance. If a job is not completed as agreed upon in the contract, the bond insurer can cover the expenses needed for project completion.
Bond insurers have the right to deny coverage to highly risky businesses, which may result in those businesses closing their doors permanently. Why? Many occupations within the construction industry must be bonded in order to obtain a business license, meaning that, without being bonded, such businesses cannot legally operate. In essence, bonds limit the industry to the most trustworthy and professional businesses, allowing property owners to feel at ease when letting bonded business into their home.
There are many types of surety bonds available, each designed for specific occupations within the industry. And if a large project is expected to exceed the amount of a bond, a business can purchase a performance bond to make up the difference.
While a bond protects the client, a bonded business can protect itself by writing up contracts with specific details to avoid future confusion or miscommunication that could lead to a client filing a claim.
Learn more about how bonds can help you. Call Dain Insurance Agency at 909.396.6746 for more information on Diamond Bar CA business insurance.