Surety bonds are a
three party agreement that protects private and public individuals or
corporations from financial loss. They function as a guarantee that an obligation
will be met, or a payment settlement will be reached. Here are a few things you
need to know about surety bonds with Floyd Arthur.
Surety
Bonds are not the same as Insurance
State and federal laws
may require you to have many different types of insurance, but surety bonds do
not work the same way as insurance. Insurance assumes there is an inherent
risk. For example when you drive your car, there is a risk you may get in an
accident. A surety bond with Floyd Arthur is actually a way to guarantee there is little risk. It is a promise
that the obligation will be met, not matter what. In addition, insurance
protects the policyholder from making out of pocket payments; a bond does not
offer the same protection.
Surety
Bonds do not Protect against Out of Pocket Expenses
Insurance protects the
policy holder from large out of pocket expenses including the liability of a
lawsuit. Bonds do not offer that financial protection, and the principal of the
bond will be required to pay as much as they are able.
Bonds
are Easy to Attain...if You are Qualified
Floyd Arthur New York considers several different aspects
before agreeing to issue a surety bond. Credit and financial strength are part
of the consideration, as well as the location, size, and type of job that will
be performed. The surety may also consider what other projects the company is
working on how close to being completed those contracts are
Surety
Bonds Protect Everyone Involved
Assuming both the
contractor and subcontractor are bonded, each party involved will be protected
from losing valuable assets or money. It ensures higher quality subcontractors
by forcing out unreliable or inexperienced workers. General contractors are
also protected if vital subcontractors pull out at the last minute. Subcontractors
are protected if anything happens with the general contractor and the project
is canceled. Moreover, owners can rest easy knowing that their work is being
completed by reliable, experienced workers.
