| The construction industry
by nature can be risky for all parties involved.
Because of these risks, contractors must be
able to assure project owners that their obligations
will be fully met. This is done through bonding.
Bonds are a unique form of credit that guarantees
the pre-qualification, performance and credit-worthiness
of a contractor at a cost lower than the rates
associated with typical lending institutions.
Through a bond, the contractor, surety company
and the project owner enter into a three-way
contract in which the surety company promises
to pay the project owner (city, state, etc.)
in the event the contractor fails to fulfill
the obligations of the construction contract.
Both the contractor and surety company
are required to sign the bond. The project
owner is not required to sign the bond,
but if they fail to perform their own obligations
under the construction contract, the contractor
and the surety company are no longer bound.
Bonding has become the standard in the
construction industry. Where once letters
of credit and traditional bank loans were
frequently accepted, today’s market
requires contractors, large and small, to
be properly bonded. And at DeSanctis Insurance
Agency, we’re ready to help you with
all your bonding and insurance needs.
For more detailed information on the DeSanctis
Insurance Agency surety bonding process,
along with a helpful Bonding Guide, please