If you are a contractor, chances are good you will bid on work that requires surety bonds. For example, surety bonds in Pennsylvania might be mandatory on public construction contracts, private contracts, and even commercial contracts.
But what is a surety bond? Essentially, it takes the place of a cash deposit. The bond covers your pledge that you will fulfill the terms of a contractual agreement. For example, a bid bond is a guarantee to your client that you will enter the contract at the price quoted, if your bid is selected. A payment bond is a promise to pay all individuals and companies hired for the project. A maintenance bond is a pledge to correct, or reimburse the client for, any defects that arise. Other types include performance bonds and labor & materials bonds. All of these bonds act a bit like insurance policies between you, as the contractor, your client, and a third-party surety bond company.
So what should you look for in a surety bond company? You want to chose a company that values your time, since surety bonds in Pennsylvania are time-sensitive. The company you chose should find you cost-effective solutions to help you in this area since it is so vital to the success of any contractor.