Surety bonds can give your business a competitive advantage and help you stand out in your industry. There are a number of reasons why customers prefer to work with companies who have taken the time to obtain this additional form of insurance to demonstrate the integrity of their services.
What is a surety bond?
Surety Bonds are in place to ensure contracts for services are completed, even when the company defaults, to protect the customer from financial loss. There are four main types of surety bonds:
- Payment Bond: This ensures payment for any subcontractor or supplier associated with completing the job or service.
- Bid Bond: This ensures the bidder will provide the payment and performance bonds once awarded the contract.
- Performance Bond: This ensures that completion of the contract will be performed according to the conditions and terms of the contract.
- Ancillary Bond: Ensures that all requirements of the job or service are performed.
Why is it important to have a surety bond?
Surety bonds are important for a number of reasons:
- Increases credibility
- Gives you free rein to utilize all funds or lines of credit granted by your banking institution
- Helps protect the confidentiality of your activities
- Protects the company against unwarranted claims
- Provides access to advice from other needed professionals, such as estimators, accountants, and attorneys
When do you need a surety bond?
If you are in the construction industry and are seeking work from the federal government, a surety bond is probably required. Additional industries that may require surety bonds are financial, automotive and other specializations that require licensing from a state, federal or municipal government.
Taking the time to obtain surety bonds to protect your organization assists in building your brand and positioning you as a credible service provider to the general public. Having this type of insurance demonstrates that you care about your company’s image and are willing to go the extra mile in ensuring that customers receive the best service at all times. A good insurance agent should be able to explain the intricacies of surety bonds and how they can help your organization.
Get the protection you need. Call The Weimer Group at (877) 791-1707 for more information on Philadelphia surety bonds.