By submitting a construction bond, the party managing the construction work states they can complete the job according to the contractual policy. When a contractor fails to abide by any of the conditions of the contract, the surety and contractor are both held liable.
What makes you eligible for bonding?
To be bondable means that your future employer is ensured and protected against any loss that comes as a direct result of fraudulent, dishonest, or criminal activities of an employee. If you’re bondable, it means that you are trustworthy and reliable.
What is a bonding company used for?
The bonding company, also called the surety, promises to pay the project owner a certain amount of money if the contractor fails to fulfill the terms of a contract or fails to meet some other obligation.
When should an employee be bonded?
Companies bond employees to protect against employee theft and dishonesty. Bonding provides the company with compensation in cases of property loss due to the acts of an employee. When employees have access to money or valuable property, bonding protects the organization.
What would prevent a person from being bonded?
You may be disqualified from obtaining a bond if you don’t meet your state’s eligibility requirements. Poor credit scores, history of criminal activity and moral turpitude are among the reasons for being denied a surety bond.
What kind of Bond do I need for my job?
A Blanket Position Bond is another type of bond that might work better for your company, particularly if there is high turnover or if you’re frequently adding people to the organization. This type of bond provides protection for certain positions in the company rather than specifically named employees.
What do you need to know about bonding in construction?
A bond constitutes a legal guarantee that the project will be completed as expected. In instances where a bonded contractor fails to perform, the bonding company will provide some form of restitution to the owner. While bonds are not required on all projects, there are strict bonding standards on government work.
Do you have to have bonds for government work?
While bonds are not required on all projects, there are strict bonding standards on government work. Many private owners and developers might also require bonds to protect the interests on various projects.
What to do if you think you need to be bonded?
If you’re unsure whether you need or ought to be bonded, you can consult an attorney, a surety or insurance company, or another qualified bond specialist who can advise you on your individual situation.
