Contractor bonds are bonds for contractors to have on hand to show a potential client that they will be covered if the contractor does something wrong. Contractor bonds are also sometimes called performance bonds (to make sure that they perform up to contractual obligations) or surety bonds (making the client “sure” if something goes wrong).
These ideas are all built around the bond company coming in and paying the client or hiring a contractor themselves to finish the work or make it right. The contractor, you in this case, would have to pay back the amount that the bond company had to pay to finish your work or bring it up to contractual specifications.
Contractor bonds, or surety bonds, or whatever you want to call them, have many uses beyond the simple function. The main function that they have is to make the client feel secure. You will find that all things being equal, you will get the bid over a contractor without a surety bond in place.
This is because the client has the peace of mind that you have taken the steps necessary to make sure that they are taken care of if anything goes wrong.
This surety bond puts you in a much better place than the contractor without it. Surety bonds, or contractor bonds, can be the one element your business has been lacking, and you don’t want to continue to throw business away by operating without one in place.