[butcher733]

I would like to know what the purpose of bonding is and how you get it. What is the amount based on and how do you increase your bond for bigger jobs.

 

[erics37]

To ensure electrical contuinity between non-current carrying metal parts :jester:

 

[bkmichael65]

It's to insure that you don't leave the customer hanging on unfinished work, theft, etc. It's generally based on the size of the job or what the customer asks for. The insurance companies sell these so you can just call your local agent for quotes

 

[wildleg]

there are different types of bonding, but for contractors basically performance and surety. Some owners require contractors (and subs) to post a performance bond for their projects; each contractor pays the bonding company a specific fee for that project, and the bonding company agrees to be the bank if something goes wrong or does not get finished and pay to have it finished. Then they sue you for that amount. Some jurisdictions require surety bonding before they will license you or your company, and the surety bond pretty much is the same thing, just not tied to one project.

 

[butcher733]

there are different types of bonding, but for contractors basically performance and surety. Some owners require contractors (and subs) to post a performance bond for their projects; each contractor pays the bonding company a specific fee for that project, and the bonding company agrees to be the bank if something goes wrong or does not get finished and pay to have it finished. Then they sue you for that amount. Some jurisdictions require surety bonding before they will license you or your company, and the surety bond pretty much is the same thing, just not tied to one project.

So what determines if you can get a bond big enough for a large job, assets?

 

[flyboy]

This is a partial list of what one company would require. Your financial strength is a big factor in procuring a bond.


1. Completed "Contractor Questionnaire"
2. Completed "Work in Progress" schedule
3. Last three (3) CPA prepared, company year end financial statements
4. Personal financial statements of the business owner (s)
5. Bank letter verifying balances and credit arrangements
6. Copy of Contractors License
7. Resumes on owners and key personnel
8. Current Insurance Certificate
9. Required Information for General Indemnity