There are an endless number of things that can go wrong in a construction project. Your design doesn't fit the layout like you thought it would. You are off budget and have to delay. You have technical difficulties, either with equipment or on site. Your material planning was off. The list could go on and on. The point is all of these potential disasters will make any investor nervous when hiring a construction company for their job. This is where surety bonds come in.
A surety bond is insurance purchased to protect the investor in the event something big goes wrong, be it delays, disruptions, or you as the builder fail to complete the project. When this happens, you are responsible for paying the claim. Because of this, it is vital that you choose the right surety agency. Not only will they help you find the right bond for your project, but they will also be your advocate if something goes wrong and you're stuck with the bill. The big question now is how do you choose the right surety agency? Here are a few tips.
- Make sure they can properly explain the benefits of a surety bond. The purpose of a surety bond can be confusing since you will be paying the expenses should anything go wrong, so be sure your agent can thoroughly explain why it is necessary to have the bond. Make sure they can prove their complete understanding of their product.
- Discuss claim avoidance. In most cases claims can be avoided if you're properly prepared. If your agent is only in it for a quick sale than he's not your guy. You want someone who will take every necessary step to insure you get through the project with little to no hiccups. Preparation is key, and that should be important to you and your agent.
- Know the bond's guarantee. There are so many different bond requirements that it would be close to impossible for you to know everything involved in the insurance. This is why your agent has years of training. Find an agent who knows the language or is at least willing to do the research to find out what type of bond is right for you. This will save you time and headaches.
- Find an advocate who will make you a priority. Some insurance companies are so large that people are more of a number than a person. This doesn't mean that all large insurance companies are bad, but be sure that you find an agent who you are comfortable with. You need to know that they will see you as a person and stand up for you if something goes wrong.
Finding the right surety bond doesn't have to be a daunting task. Pick the right surety agent and they will do the work for you. Just be sure to find someone competent that will work for you, not the paycheck. You'll be happy you did when you find yourself face to face with a claim.