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By: Michael Guestsmith, Thu May 20th, 2010
General contractors know all too well that construction and property development jobs are lagging along with the economy. Therefore, construction contractors are looking for ways to attract clients. Legitimate general contractors are licensed and bonded to protect their interest and those of the client. General contractors build their businesses on the reputation of their work , referrals, and testimonials from satisfied customers. Whether a relatively small home project or a large commercial construction project, consumers want to make smart choices and hire sound companies.
A performance bond is issued by a third party, a surety agency, and serves as a guarantee to the client that all work will be completed satisfactorily. While a performance bond is required for all large commercial jobs, it is often requested by homeowners as well. A number of issues may prevent the completion of a project by a contracted contractor, insolvency for example, and a performance bond protects the job owner. However, it has an advantage to the contractor in that the performance bond may be added incentive for potential clients and may serve to promote business. Many small business and organizations along with homeowners will not take bids from general contractors who are not licensed and bonded. Being able to provide proof of bonding allows a contractor to enter the bidding process and win jobs. Clients see performance bonds as a way to protect themselves. Litigation is a threat to everyone on the spectrum of a construction job. General contractors know doing business with subcontractors who carry subcontractor bonds is a smart idea and protects the general contracting business. Performance bonds typically incorporate payment bonds; expect performance bonds to cost a fraction of a percentage of value of the entire contract.
Like other construction bonds, contractor license bonds, payment bonds, and bid bonds, are available through a bonding agency such as Surety 1, Surety Solutions Insurance Services, Inc. The agency is the third party in the bonding procedure serving as guarantor between the contractor and the project owner. If you are a contractor and need a performance and payment bond, look to Surety 1 to provide solutions. Surety 1, a leading surety agency, has been serving its customers since 2003 and can meet all bonding requirements at competitive prices. Their professional, knowledgeable, and friendly staff can answer questions online or by phone. Performance bonding will help secure bids and business in this tenuous marketplace.