Sometimes applying for small business insurance in New York means dealing with surety bonds. These types of bonds are quite common among construction projects. There are usually three people that are involved with the bond, which includes the owner of the construction project, the contractor, and the company providing the bond.
When You Need Them
There are different types of surety bonds to choose from, but you basically need them when you want to ensure that a project is to be completed. With construction, sometimes deals fall through and a contractor is unable to complete the job. With a surety bond, if the contractor backs out, also known as defaulting, the surety company is responsible for finding another contractor to complete the job.
Construction projects are often time sensitive, and having a contractor back out at any time is quite the inconvenience. Surety bonds are beneficial because they help with finding a replacement when the original contractor defaults. At the very least, the surety company can compensate project owners for any financial loss resulting from the default.
Finding a Reliable Provider
When looking for surety bonds tied to small business insurance in New York, it’s important find a reliable provider. If a contractor backs out of your project, you want to make sure the surety company will make good on their promise to find a replacement or provide compensation. Research companies thoroughly before entering into a contract.