Everything You Should Know About Labour And Materials Bonds
Although it may not seem like it, contractors have tons of responsibilities on their shoulders. These individuals are required to work hand in hand with a large number of different companies and professionals. Here at SuretyKings, we wholeheartedly understand the complications that may occur, when various professionals are required to depend on a singular entity. This is why you will want to take full advantage of our labour and materials bonds. Below, you will learn more, so you can get covered today!
Understanding The Labour And Materials Bond
What precisely is this type of bond and what does it cover? Well, this bond generally helps to protect professionals, material suppliers and subcontractors. The bond guarantees that each and every one of these individuals and entities will be paid in full for their services or supplies. Below, you will find a list of items that are covered, by this bond.
The bond covers the payment for each and every one of these items, in case the contractor fails to make the required payments.
In Conjunction with Performance Bond
When a contractor is hired to oversee a construction project, they will be responsible for every aspect of the building process. A labour and material bond is often utilized in conjunction with a performance bond. This ensures the project owner that they are fully protected from monetary loss, even the supplies and services provided by subcontractors.
Most surety companies require the contractor to apply for both bonds and are hardly ever executed alone.
Helps Avoid Litigation
Although it is possible to proceed ahead, without obtaining the L&M bond, doing so can be very risky and could result in further costs and complications. If the L&M bond is not in place, lawyers and innumerable hours of litigation may be required, in order to obtain the money that is owed. This can dramatically hinder a company’s ability to bring in revenue. With an L&M bond, these responsibilities will fall into the lap of the bonding company. Suffice to say, this helps to prevent litigation and ensures that the complication is dealt with much sooner.
If for whatever reason a contractor pulls out of a bonding project, there will be a chance that the project owner will be left with the responsibilities. This could involve accepting calls from angry subcontractors or suppliers. While his is truly unfair business practices, it does occur and quite often. If a labour and performance bond is activated, then the project owner can turn the ruthless job over to the surety company.
It is the surety’s responsibility to help reduce these horrendous burdens, since the fault does not lie in the hands of the project owner, but the contractor.
Getting Bonded Now!
As a labourer or material supplier, it is imperative to protect yourself and your work. There is truthfully no better way to do this than by obtaining a sufficient Labour and Materials Bond. Rest assured knowing you’ve come to the right place. Here at SuretyKings, we’ve been serving contractors in Canadian borders for over 30 years! When you’re ready to get covered, you will want to make contact with our experts right away!