Contractor & Surety Bonds in Portland, Oregon
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Contractor & Surety Bonds Form
Contractor & Surety Bonds Information
If you are a contractor of any type, you want to promise your clients you’ll look after them if you can’t complete your work. One of the most assured ways to do so is through offering surety bond options. Bonds function as guarantees of compensation if you can’t keep your promises, and there are numerous bond options that the average contractor might need.
Arnold Bruce & Doerfler is committed to helping every client in Portland, and throughout greater Oregon, get the appropriate bond packages for their needs. Our expertise, commitment to detail and world-class customer service will ensure that your business is protects in all ways at all times.
Call us at (503) 222-1951 or request your bond quote today!
What is a bond?
By being bonded, your business guarantees financial assistance to clients in the event that you fail in your duties.
Let’s say, for example, that you cannot complete a job. By failing in your contract, regardless of the reason, you might have an obligation to compensate the client for their losses. You aren’t the only one who stands to lose out, after all.
With a bond, you’ll essentially guarantee your customer you’ll repay them. The party in need will file a claim with the bond company. The company will then process the claim, and issue payment. In this way, a bond will function a lot like an insurance claim.
How are bonds different from standard insurance?
Still, there are some important ways that bonds differ from insurance. While they will offer a settlement to affected parties, they don’t necessarily guarantee financial protection to the bond carrier.
If a bond company pays a claim on your behalf, you still have a financial obligation to the bond company. You must repay the bond company for the cost of the claim. So, in that regard the bond is different from your standard insurance. Rather than getting off scot-free, you’ll still face a potential for financial loss.
Who are the parties in the bond?
Bonds involve three parties:
An obligee is generally your client, or another party who requires a bond.
The surety is the company issuing the bond.
Each party will interact differently in case of a claim. In some cases, the obligee files the bond claim, while in other cases it is the principal. In other situations, the surety company will pay the obligee directly, while others will pay the principal. The principal will then pay the obligee. Afterwards, the principal and surety will work together to settle the outstanding costs.
What are the benefits of being bonded?
By carrying bonds, you’ll create a better financial reputation for yourself and your company:
You’ll be able to promise your clients more compensation in case you can’t follow through with a contract. That will likely make you more trustworthy.
Many potential clients require businesses with whom they work to carry bonds. Therefore, to increase your ability to make contracts, consider bonded options your key.
What types of bonds do contractors need?
There are numerous bonds that the average contractor might need:
Performance Bond: Contractors must post a performance bond for contracts valued at $100,000 and above. This ensures that he or she will perform the job as promised. If the contractor defaults or cannot complete the project, the surety company is responsible for finding a replacement and/or compensating the project owner for losses.
Payment Bond: Often underwritten with performance bonds, a payment bond ensures that suppliers and subcontractors who work on the project are compensated fairly and in a timely manner.
Supply Bond: When a contractor supplies the materials for the project, a supply bond ensures that the project owner will be compensated if the contractor’s supplier defaults and cannot provide materials as promised.
Subdivision Bond: For city, state or federal projects, a subdivision bond ensures that the contractor will make mandatory improvements during construction, according to local mandates. Improvements may include sidewalks, gutters, streets and more.
Site Improvements Bond: Similar to subdivision bonds, a site improvements bond ensures that a contractor makes any necessary improvements to an existing building to keep it in or bring it up to code.
Our agency team is made up of bond experts who are more than happy to help you secure the exact coverage your operational needs.
Contact Us Today!
Contact us to learn more about planning your future with the right bonding options. We are happy to answer your questions and help begin your investment process today.