If you have seen multiple jobs that you would like to bid on, ones that are quite large, you will likely have to upgrade your surety bond to qualify. In fact, if you don’t have a surety bond, there are many jobs that you will not be able to bid on because they need to have that insurance that you will complete the project. A surety bond is nothing more than an insurance policy. It guarantees that the obligee will have their jobs completed. Let’s go over how this works in more detail, and then how you can easily find those that provide surety bonds at reasonable rates.
How The Surety Bond Process Works
Surety bonds are very simple to understand. As mentioned earlier, they are very much like an insurance policy. You are going to pay a percentage of the value of the surety bond to the company issuing it, and to keep it active, you must pay every year. The amount of the bond will be anywhere from $100,000 to well over $1 million, and qualifying for these will depend upon your credit rating and track record. If you have good credit, and you have a track record for completing jobs for other people that you have been successful at winning the bid, you should have no problem getting one or more of these bonds.
How Do You Save Money When You Purchase One?
You can save money by doing a couple different things. First of all, compare different businesses. Not all of them are going to charge the same percentage for the bonds, so you can save money that way. Additionally, you can improve your chances of getting a bond if you have bad credit if you are working with a much more flexible company. These are just a couple things to consider as you are looking at the many companies that issue them, especially if you need to get one as soon as possible.
Will You Need More Than One?
Every job that you bid on will require you to have a surety bond that is at least equal to the amount of the job itself. In some cases, you can apply for several different jobs, and if you only get one, that surety bond should cover the total amount. If you get multiple jobs that total in the millions of dollars, you are going to need to upgrade or get additional surety bonds just in case you cannot finish the job. If you are working on multiple jobs, you definitely need to have a higher value with your surety bond.
Once you, the principal, have found the surety bond provider, you need to get this done as quickly as you can. There are always going to be incredible jobs out there that could make you abundantly wealthy, but without this bond, you will not be able to bid. It is a simple process, one that will take no longer than an hour to fill out the form and subsequently receive the bonds. It is an investment into your company, one that will pay for itself many times over, by simply allowing you to bid on many of the better jobs.