SuretyKings Offers The Best Performance Bonds In Canada
The construction industry is truly exploding in the country of Canada. As a construction contractor, Canada is an ideal location, where you’ll be able to obtain a great living and plenty of job opportunities. Unfortunately, your line of work isn’t all fun and games. In order to actually obtain projects and begin making money, you will need to obtain a contract bond or two. The payment bond and performance bond are undeniably the most vital of all. Below, you will learn about the importance of the performance bond.
Understanding The Performance Bond
As a contractor, you likely already know about the various different types of bonds. If you’ve ever placed a bid on a project, you were likely required to obtain a bid bond. The performance bond is likely even more crucial. This bond provides the client with the reassurance that the job will be carried out in a satisfactory manner. As soon as you’ve received the rights to a project, you will be required to obtain a payment and performance bond. If all of this sounds confusing, you should not worry. SuretyKings will be able to provide you with the answers to each and every one of your questions.
What A Performance Bond Doesn’t Do
Although a performance bond is undeniably a very helpful bond for owners and contractors, it cannot be used for a few distinctive purposes. For starters, contractors cannot utilize a performance bond, as a way to access quick cash. It is also not a good conflict resolution tool. The bond only comes into effect, if the contractor defaults on their obligations. It will have no impact on disputes, which arise between the contractor and owner, during the project.
What Owners Can Do
In actuality, the owner will not be able to file a formal claim, until the contract is default and has been officially declared. Of course, the owner does not need to wait for a minor problem to escalate. Instead, they should make contact with the surety right away. Performance bonds for contractors can be immensely beneficial for property owners and will give added reassurance. If you’re suffering through complications with your contractor, contacting our company or reading more about what being bonded means is recommended.
Surety Bond Price
There is a method that must be followed, in order to determine the appropriate bond price. An underwriter will need to factor in the type of bond, total bond amount, and the premiums to come up with the actual surety bond price. Each contract or satisfactory bond is rated according to its level of risks, which may be linked, but not limited to the number of claims paid out to a specified type of bond.
As an investor in building constructions, it is crucial to guarantee reimbursement, when faced with a large monetary loss. Investing a large lump sum into a building project, there are going to be huge risks for all parties involved. A contract bond is going to be your only option, which is why you should always force the contractor to acquire this legal document.
Contractors may find themselves struggling financially, if they failed to plan the project appropriately. Underbidding can definitely increase these risks for the contractor, but if all fails, the client or project owner will take the blunt of the fall.
Poor Credit Rating
While most investors are aware of the risks involved in high monetary business projects, they may not be aware of the risks of being turned down for a bond. Before you go out there and hire a large contractor, you need to make sure that they are bonded. Small contractors may be issued a bond, since they only deal with small projects, even if they have a low credit score. This cannot be said about large contractors, since the monetary risks may be too high.
Get Covered Immediately
As a contractor, you should wholeheartedly understand the importance of the performance bond. The bond will help you obtain the project, while providing the owner with a significant amount of peace of mind. Of course, working through the buying process can be complicated. With this in mind, you should make contact with SuretyKings right now & Request a Surety Bond Quote. We’ll be able to help you obtain the required bonds, without stress or further difficulty.