Choosing the Right Construction Bonds
When your business is the creation and expansion of buildings around your city, state, or region, the bonds you choose to manage your risks are just as important as your insurance choices, if not more so. The unique combination of bonds that guarantee financial compensation under certain conditions and insurance that pays out claims to cover anticipated risks come together to protect you, your customers, and your employees. This complex system has something for any construction situation, but that doesn’t mean every situation requires every type of bond.
Major Construction Bond Types
Bid, performance, and payment bonds are common on many types of projects, providing coverage for the risks your clients take on when hiring you to build for them. These bonds ensure you are paying your subcontractors, providing workmanship that meets performance standards, and guarantees that you will perform work for the value of the bid if awarded a contract. Those are pretty universal needs in the industry. Other bond types may also be required, including site improvement, environmental, and sometimes maintenance bonds. This list is hardly comprehensive, and sometimes customized bond packages need to be put together to cover truly unique construction endeavors.
The key to getting the right bond package for each project is working with professionals who make the construction industry’s coverage needs its primary business. That way, you can rely on their knowledge to help you pick the right risk management bonds and insurance coverage options.