Today, people want to take minimal risks when they enter into a contract to get some work done. This could be related to healthcare, construction, finance or even marriage. Surety bonds are the financial instruments that can help those in need of financial backing to get the contract. These contracts provide not just the financial security but also a definite assurance that the contractual obligations will be fulfilled as promised. The easiest way to go about it is by looking for a surety bond online that is not just the right type but also ensures the performance and conditions as intended.
If you want to feel secure through a surety bond, you must make sure that you remember the following details related to applying for a surety bond online:
- The surety bond is a three-party agreement between a project owner, contractor and the surety company
- Before obtaining the bond, contractors must clear a pre-qualification test that determines their valuation and reliability
- Surety bond company only issues the bond when it is certain that the contractor is capable to finish the project on time and as per the project conditions
- If the contractor fails, the project owner has to formally declare the contractor in default
- The value of the bond is usually between 1 and 2.5% of the contract’s worth, and could vary as per other factors such as the credit, contract and the warranty