Are you planning to undertake any form of construction and desire to learn about how to get a contractor bond? If so, this write-up will provide crucial tips that will unquestionably prove helpful with your needs. Also known as a surety bond, a $15,000 California contractor bond refers to a surety bond that is required by the CSLB to offer protection against financial losses or disruption related with failure by the contractor to adhere to contract specifications or to finish the job as specified in the terms of the agreement.
When contractors vie for construction jobs, they are normally needed to put up a construction bond. Generally, the contractor bond offers assurance to the owner of the construction project of concern that the hired contractor will perform his or her role following the terms specified in the agreement.
Benefits of a Contractor Bond
As a result of the assurance offered, bonding a contractor any time you are having any form of construction task presents many merits including:
*Prevents contract disputes
*More attractive to subcontractors, suppliers, and employees
*Signals financial strength
How to Get a Contractor Bond
Tip#1: Verifying the Kind of Surety Bond you Require
Before you strike a deal with a surety provider, it is vital you are aware of the specific kind of surety bond you require. This is important since the type of surety bond needed differs from one state to another. Ensure therefore you enquire from the project owner or the government agency about the surety bond form you require before applying for one.
Tip#2: Applying for your Surety Bond
When shopping for a bond, it is ideal you consider collaborating with a surety bond provider that provides bonds nationwide as it will enable you to secure an expert that can bond you regardless of what state you opt to work in. Some of the details the surety provider you link up with will require from you include your personal financial history and professional work experience among others.
Tip#3: Acquiring a Surety Bond Estimate
Several factors will determine the price you will be required to pay for your surety bond. For instance, if you have a good credit history, you may be required to pay 1-5% of the amount of bond unlike when having a poor credit score whereby you could end up paying up to 20 %.
To determine the exact amount you will be required to pay for your surety bond, it is vital you contact a surety firm.
Tip#4: Paying for a Surety Bond
Once you approve your surety bond quote, you will likely be needed to pay the entire premium up front. However, there are situations whereby surety underwriters choose to provide premium financing to a qualifying applicant.
After you have paid the premium, your surety provider will then execute your bond before sending it to you.
Tip#5: Verifying the Details on Your Surety Bond
Once you receive your surety bond, it is crucial you confirm that all the details on it are correct. In case you encounter any error on your surety form, ensure you inform your surety immediately.
After you have confirmed the accuracy of your bond form, you should then finalize the exercise by filing the surety bond form with the specific obligee that is in need of it.