Strive as hard as you may to do a great job for each client that you serve, there will always be occasion when something goes wrong. The client might be unhappy and make unjustified claims even if you have performed the job outlined in the contract. To protect yourself financially, and to satisfy the demands of your client, broker surety bonds are a part of being in the construction or project management business. Here are two reasons why you might need such a bond, along with a description of what this will do for you.
Your Client Demands One
The construction business is high dollar. Even a small project can cost your client well over a hundred thousand dollars in the end. As such, they want to have an assurance that you will fulfill the obligations that you have agreed to. You will be the one required to post the bond, and this entails working with a third party that provides the financial assurance on your behalf. The client is then assured that their financial investment is protected.
Guaranteed Acceptance of the Terms of the Contract
The surety bond will stipulate the terms and conditions of the contract. It is a way of eliminating any misunderstandings down the road. If you violate any of those terms, then the client will once again be protected based on you having obtained the bond.
These two reasons alone highlight the usefulness of broker surety bonds. The cost of obtaining such a bond should be built into the cost of doing business. Make sure you have all your proper licenses and permits in place before beginning a project and work hard to satisfy the terms of the contract. The bond is in place to make sure that all parties are protected in the end.