For most subcontractors,
the pros of having a surety bond heavily outweigh any cons. It protects you
from financial losses and makes it more likely that companies will hire you.
Surety bonds with Floyd Arthur are
easily attained for qualified applicants and are affordable as well.
At the
same time, it is also important for subcontractors to verify that ‘other
parties involved’ are bonded. This ensures everyone is protected from financial
loss, if the contract is not fulfilled.
First, let us make sure
you are aware of how surety bonds work and who needs them. A surety bond is a
contract between three parties where one party (the surety) guarantees to a
third party (the obligee) that the primary party will meet a specific
obligation.
The following example will make it a little easier to understand
how surety bonds with Floyd Arthur work:
John has promised James he
will build a fence on James' property in 2 days for $400 dollars. James does
not know John, but they have a mutual friend, Matt. John asks Matt to tell
James he is good for his word and then promise to build the fence himself if
John falls through. (With the understanding that John has never fallen through
on a promise and fully intends to finish the fence in two days time).In this example, “Matt” is
the surety, “John” is the principal, and “James” is the obligee.
If you are working as a
subcontractor, there are two different ways you may deal with bonds. First, you
may wish to seek bonding for yourself. This guarantee will lead to more work
and higher financial gain. It shows that you are serious and capable of meeting
your obligations. To do this, contact Floyd Arthur New York to discuss and ask about applying for surety bonding.
Bonding is affordable and allows you to compete in an increasingly difficult
economy.
The other aspect of surety
bonding for subcontractors is making sure individuals or corporations that hire
you are also bonded. Continuing the example above, let us say that John is
going to build the fence, but subcontract out the painting to Tom and pay him
$50. Tom does not have any mutual friends with John, but goes out and buys the
paint and turns down another job for that day.
Now let’s say that John
breaks his leg and cannot build the fence after all. Tom has already spent
money and turned down work, leaving him at a financial loss. Since he did not
have anyone guarantee John would meet his obligation, Tom has no way to recoup
the lost time and money. Had Tom made sure John was bonded, he would have been
protected against this loss.
