As a contractor, you must consider every aspect, every angle that may come into contact with your business. It is your responsibility to take care of these things, and plan ahead of them to prepare. Surety bonds are a great way to do this, because they secure your client against anything that might happen. Surety bonds are security instruments that pay your client in cases of things not getting done according to contract.
The way it works is that you contract with a surety bond company and agree to pay them a monthly fee, usually. They agree to extend to you what amounts to a line of credit so that there is an amount of money available to be paid to the client if anything goes wrong. This is very reassuring to your clients and really puts you in a different place than your competitors. Surety bonds place you on a higher level, and all things being equal will get you the bid over others simply because you took the steps to secure them ahead of time.
Surety bonds are sometimes required by different entities, and this puts you in a different place altogether. It is one thing to put a surety bond in place ahead of time for your customers, but it is quite another to have a surety bond be required of you by either a government or company you are trying to secure business with. Don’t be caught unprepared.