Unlike General Liability Insurance or Commercial Auto Insurance, which primarily protect your assets as well as the assets of your company, Contractors Bonds are a type of insurance that serve to protect your clients.
When someone hires a contractor to perform a job, the contractors bond is essentially a financial promise that the job will not only be completed, but will be done well and fulfills the client’s expectations. If the contractor neglects to fulfill his responsibilities as a service provider, his bond agency will compensate the client for reparations.
Laws regarding contractors bond requirements vary by state, but in most places a contractor must be bonded in order to be licensed. In addition to serving as job insurance for a client, in the event that the contractor insufficiently completes the job (or simply doesn’t complete it at all), contractors bond also protect consumers from being liable for unpaid suppliers or subcontractors, damaged property as a result of the construction job, or any stolen or lost materials from the project site.
Surety companies are agencies that provide contractors bond. They charge the contractor a premium to keep the bond current, and the contractor’s premium rates can be affected by his professional history and the dollar amount of the bond. When a client wants to file a claim if his contractor walked off the job or otherwise insufficiently fulfilled their agreement, the client contacts the surety company and provides evidence of the subpar service he received.
As a contractor, it’s important to have a contractors bond through a reputable company, because it assures your clients that you are a trustworthy service provider. It also gives them the peace of mind that they are protected financially from any liability associated with the upcoming job. You can prove that you’re a bonded contractor by providing your clients with the number on your contractor’s bond or by showing them your document of certification.
If you’re in need of a contractors bond, our network of insurance providers are more than happy to assist you. Please fill out the form to get your free contractors bond quote today!
Please fill out the form to get your free quote started. Once we have processed your information one of our representatives will contact you regarding your policy options or if further information is required.