Chatbug Karen

As a contractor for floor covering sales and installation, we are often called upon to bid on large contracts. We have had the pleasure of working at many schools, hospitals, nursing homes and businesses in this and surrounding counties.

As a licensed business, we are often asked to maintain a surety bond. There are different types of surety bonds and the ones that we are familiar with are contract bonds. This type of bond is a guarantee that the bonding company will provide a performance bond to us, if and when we are awarded the contract. A claim can arise if the bonding company refuses to write the performance bond, which is why the surety will underwrite bid bonds with the same caution as they do for performance bonds. In other words, the surety will not approve a bid bond, if they are not going to approve the performance bond.

That is where the contract bond is specified. It is a guarantee that we will perform the work. It is also a guarantee that we will pay our suppliers. If we don’t pay the suppliers we ordered materials from for the job, the supplier can put a lien on the business where we are working. The bond also insures that we will pay our laborers.

These steps are important to maintain standards that our business and every business would and should want to uphold.

I have explained bonding the way I understand it. I am not an expert. We always rely on a bond consultant. An excellent bond consultant is JW Bond Consultants, Inc. They are an excellent source of information about all types of bonds.