PERFORMANCE BONDS

With the economy twisting in the wind, people are paying particular attention to the details when deciding to make major purchases. Home remodeling and new construction are indeed major outlays; both consumers and contractors need to safeguard their interests. If you are considering doing extensive work on your home that requires the hiring of a contractor, it is important that you understand the bonding responsibilities and obligations. Additionally, contractors need to be assured that the work contracted will be paid for.

There are a number of ways to insure that work will be finished on time and within guidelines established by codes and standards. A Performance Surety bond is purchased from a bond agent and protects the consumer from financial loss should the contractor not uphold his or her part of the contract. The 3rd party guarantor issues a guaranty, a performance bond, up to 100%. This way, the consumer is compensated for any monetary loss if work is not performed in accordance with the contract’s terms and conditions.

This should not be confused with a completion bond. A completion bond insures the money lender that the job will be completed. There are also surety bonds that protect the consumer so the contractor will comply with city or state code and regulations. Payment bonds protect the laborers, subcontractors, and suppliers. You have no doubt heard horror stories of someone contracting a room addition or a pool and ending up with a lien on their home because the contractor did not pay for drywall or cement. All of these bonds are supplied by a surety bond agent. Bonds help to protect the consumer, and a licensed contractor will have no problem providing proof of bonding. You will find that most contractors are working in good faith and are eager for your business and satisfaction. Do not hesitate to ask potential contractors if they are licensed and bonded. A good contractor will be a good business person as well.

One surety agent with a reputation for knowledgeable and professional service is Surety 1, Surety Solutions Insurance, Inc. Surety 1 can help you too.