Whether you’re a homeowner looking to get the kitchen of their dreams or you’re a contractor hoping to seal the deal, understanding contractor bonds is essential. For those who are looking to understand how a contractor bond can help both the customer and the service provider, we’ve collected all the information you could ever need. Starting with a brief summary, let’s get into exactly what these bonds are and how they can save you both time and money.
What is a Contractor Bond?
Simply put, a contractor bond is a financial assurance that your contractor will complete the job to your satisfaction. If, for example, your kitchen cabinets are not completed in the way you had agreed to, you’ll be able to contact the agency that originally issued the bond and receive compensation. For the most part, contractors are obligated to be bonded before they can even get their license; however, that’s not the case for many parts of the world. Remember to do some research into a contractor as well as the contractor bonds associated with them before ever making an agreement.
Keep in mind; there’s a wide variety of situations that these bonds can cover. For example, they often will cover any damage that is done to your house, materials that get stolen from the site or your home, and can even help if your contractor walks off of the job.
On the contractor’s end. Premiums will have to be paid to keep their bonds, the price of which vary in a case-by-case basis. Your premiums may increase once a claim is filed against you, but it’s important to remember that the person making the claim will have to provide sufficient evidence to prove their case. For this reason, contractor bonds are also a way to keep you and your finances safe.
Tips To Keep Your Bond in Good Standing
Now that we know exactly what a contractor bond is, it’s important to know how contractors can keep this bond in good standing with their surety company. For contractors, a good standing with your surety company will lower your premium and demonstrate your superior workmanship. For potential customers, a good standing will signify that you’re able to trust the contractor to get the job done right the first time.
- Keep to your schedule. – One of the easiest ways to keep a good standing with your bond company — and with your clients! — is to get your work done on time. Falling too far off of the schedule can have terrible consequences and can result in your client filing a claim against you.
- Keep in contact. – The last thing you want is for your client to think you’ve disappeared after they paid your fees. Try to keep in constant contact with your clients to make them feel at ease. This will reduce your claim rate and improve your customer satisfaction.
- Don’t take on more than you can chew. – A surefire way to have a claim filed against you is if you get yourself overwhelmed with the project at hand. To keep your clients happy and your premiums down, only take on jobs you know you can complete.
Hiring a contractor doesn’t have to be a risk. Once you complete the proper vetting and know the process through which you can file a claim, you’ll be well on your way to owning the house of your dreams! For contractors, you don’t have to be intimidated by surety companies or potential claims. Complete your work with pride and in a timely, respectable manner and you’ll have nothing to worry about. Just remember to keep your bonds in good standing!