What does a surety bond really do for you? If you are a contractor, you either have a surety bond, have applied for a surety bond, or have at least heard of a surety bond. But what can they do for you? This is a critical question for any contractor, and one you have to address carefully. Surety bonds might not even be the right choice for you at all.
You have to understand what a surety bond is in its essence before you can really make the most of its potential. Surety bonds have two primary actuating points: 1. Financial compensation and 2. Failure to perform. Where this comes in for you is that if you, as the contractor, fail to perform, the surety bond company comes in at that point and puts monetary compensation in place. You have to pay that back, of course, but it is there as protection for your client.
So how do you make the most of this for your company? Look at it from your client’s eyes. If they are looking at two different contractors, and one has a surety bond and the other does not, which one are they going to hire? Should they go with one that has protection put in place so that they are covered if you mess something up, or go with one that does not? The answer is pretty plain, so go get a surety bond.