Surety Bond Information
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Surety Bond - #BID BOND, #PERFORMANCE AND #PAYMENT #BONDs are a snap with any of Hanhart's FOUR - Bonding Partners. You can get set up with one our account leads and establish a pre-determined bonding limit, making bid and performance requests a smooth and helping to peg your best number before submitting your bids.
At Hanhart - we want to help you grow, protect and expand your business.
For contractors ready to make the leap into Public or Large Projects - we're here to help.
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Call 330.343.7767 and ask for Mickey, Zach or Charles to get set up.
How do bonds differ from insurance?
Bonds provide a financial settlement for your clients. Still, they are not the same as insurance.
With insurance, the insurance company pays a settlement on your behalf. Under a bond, however, you must pay the settlement to the affected customer. Therefore, the bond functions like a guarantee that you will cover the customer’s losses in case of a problem on your end. It tells your clients that you have the financial backing behind you to do their work appropriately.
Who are the parties of a surety bond?
Surety bonds involve three parties:
- The Principal: The person, company or entity carrying the bond. If you are the contractor, you’ll have a bond in your name.
- The Obligee: This is the individual who benefits from a bond. It’s usually the party who you work with under a contract. They will be the one to make a claim on a bond if necessary.
- The Surety: The company that issues and maintains the bond. The principal pays the surety a premium to maintain the bond. In some cases, the bonding company will pay a settlement to the obligee initially. The principal must still compensate the bond company, however.
How much bonding do you need?
Countless standards go into determining how much money principals need to carry on bonds. For example, industry standards and a company’s net worth often play a role.
However, one of the best places to look is within a contract itself. Many obligees will require the principal to carry certain bonds. Indeed, they might only award a contract after the principal enrolls in the bond. Work closely with your obligee to make sure you have bonds according to stipulations.
Bonding can help you win contracts and better serve your customers. Let us help you determine the appropriate amount of coverage for your needs.