Competition in the construction industry is strong. To maintain or increase the opportunities of your business, you can take advantage of the bonds as a tool to obtain competitive advantages. As an insurance and surety agent, we tell you what a bond is and how it can help you boost your construction company.
When do you need a bail bond solution?
Many construction projects and works – public and private – require bail. If you are working on several projects, you need bonds for each job. These guarantees promise the completion of your projects, according to the terms established in the contract.
To obtain a construction bond, it is recommended:
- Strengthen the references and reputation of your company, to build trust.
- Increase the financial capacity of your company, to comply with present and future commitments.
- Pay special attention to the requirements of the contract.
- Have a good credit history.
The price of bonds is based on the type of project and the amount that the surety is willing to support. To know more about bail bonds, visit BondCliff.net site.
What is a bond?
A bond is a contract -which you can acquire with an insurance and surety agent- that ensures the fulfillment of an obligation or payment. To sign contracts, guarantee the delivery of your projects or close deals (between individuals and the government), bail is indispensable.
The Federal Civil Code of Mexico defines the bond as ” … a contract by which a person agrees with the creditor to pay for the debtor if he does not do so “.
The contract you sign with your agent, known as a policy, involves three people:
- The agent that diagnoses your needs to recommend a bond policy.
- You (physical or moral person) also known as guarantor, guarantor or joint obligor.
- A third person, who can have a specific amount of money in case of not fulfilling the acquired obligation.
Types of construction bonds
To comply with the obligations contracted with the owner of the work, there are four main construction bonds :
- Compliance Support your own works or with suppliers until the end.
- Contest Guarantee the support of the proposal you submitted, signing and certifying the agreement.
- Advance or advance. By receiving advance funds, this bond guarantees that you will make good use of them or that you will return them in case of default.
- Good Quality or Hidden Vices. Commitment to execute your works correctly and professionally.
In Solley we have a business model specialized in bonds. For example, we understand that insurance back you after a loss, but bonds have particular advantages for your construction company, such as:
- Prevent losses.
- Support the contractors.
- The project owners are sure that the contractor will do the work and pay the workers, as well as the material suppliers.