Appletree Insurance Blog
Surety bonds are necessary for every construction project. It is a risk transfer mechanism that provides financial security and construction assurance on a project. This agreement ensures that the construction workers can complete the job according to the policy.
The way of processing a surety bond has evolved through the years. However, its detailed drafting does not change—even from the 10-day fax machine to a more electronic transaction.
Even with a more convenient and quick surety bond process, you still need to be more interested in its process. This article will focus on the practices during the surety bond’s tendering phase for a glimpse of how it's done.
Careful Evaluation of the Tender Document
Reviewing the bid documents is crucial to secure that the tender bonds are duly prepared. The terms and conditions that bind the parties involved should be identified and carefully considered. Your broker should also determine if the standard CCDC bond forms are beneficial and acceptable to all the parties.
This list comprises some of the things that need to be double-checked:
Most contractors also assign insurance requirements to the same broker to avoid miscommunication and delay. Thus, more documents have to be carefully assessed.
Surety Bond Costs
Brokers usually advise their clients about the bond costs before the tender closing. Expenses include the performance and labor and materials that the project will use. For small-time projects, the negotiations are straightforward. But, with bigger contracts, brokers usually try to get a lower premium rating so you can save as much.
With the insurance side of the surety bonds, your broker may increase limits or add new coverage to secure all bases. So, they need to provide and arrange new quotes for the adjustments made in the policy.
Medium the Involved Parties Will Use
A small yet relevant consideration that you should be mindful of is whether the surety bond will be transacted digitally or in actual papers. E-bonds are more convenient since you don’t have to wait for the physical copies to arrive.
Before finalizing the construction surety bond, you should verify everything. Being cautious with all the documents and considerations will spare you later trouble. Thus, investing your time in the process will be of great help.
At Appletree Insurance, we aim to provide comprehensive insurance policies that make your life easier. We want to help you get the insurance that fits your needs. You can get more information about our products and services by calling our agency at (603) 881-9900. Get your free quote today by CLICKING HERE. The coverage discussed is not guaranteed. Please contact our agents to make sure you have adequate coverage and your needs are being met. We are happy to help!
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