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When bidding for a new contract, your business is asked to provide a surety bond to the company or organization hiring you. Is it something you need and is it a good idea? Zimmerman Insurance Agency of High Point, NC, has more than 50 years of experience dealing with these types of issues and is here to talk you through it.

Here’s what you need to know about surety bonds: 

  • surety bondsIt's A Promise To Complete Your Work: A surety bond acts as a form of business insurance. It protects the obligee (the company that hires you) in case you are unable to complete the work you promised. If they have to hire another party, they will be compensated for any expenses lost due to the failed contract.
  • It’s Required For Most Large Contracts: While there are a variety of surety bonds, they are often required on contracts valued over $100,000 or those that various governmental agencies have put out to bid. You can offer up your business assets instead of a surety bond, but that requires expanding your property insurance and is expensive and risky compared to the cost of the surety bond.
  • Surety Bonds Protect You, Too: Working with a bond agent is a good idea for your own protection. If a claim is ever placed against the bond, the agent works as a representative ensuring that a payment against the claim and your business is legitimate and ought to be paid. This protects your assets against false seizure.

Ultimately, a surety bond works to protect both sides of a significant contract and are a good option for guaranteeing your work instead of using your own cash or assets. To learn more about how a surety bond will work for you, call Zimmerman Insurance Agency in High Point at (336) 883-6512 or see their website for additional detail. 

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