When violent weather events occur in residential areas, they usually leave a path of destruction behind them. Homes can sustain all kinds of damage that require immediate attention, and there is never any shortage of strangers promising to repair that damage for a fee. Seattle, Washington officials always warn residents not to be fooled by unscrupulous offers of help. They tell citizens that honest contractors will have contractor bonds Washington homeowners can check out.
A contract bond is not exactly the same thing as an insurance policy. Insurance removes risk from one entity to a third one and compensates any losses incurred by an injured party. A contract bond is issued by a surety company to guarantee any debt incurred by another. Its function is to prevent loss in the first place. There are three parties in a contract bond, the individual hired for a project, the client who does the hiring, and the surety company.
There are three basic types of contract agreements. One is required when contractors bid on jobs. This guarantees the bidder will provide the other two types of agreements once the bid is won. A payment bond guarantees contractors will pay all the subcontractors and suppliers used to perform the job. A performance bond assures the client that the contractor will do the job according to the contract they entered into.
Other types of agreements surety companies issue include site improvement, supply and maintenance. A subdivision bond is issued to guarantee contractors will build improvements within a subdivision according to local rules and regulations. These improvements can include streets, waste management systems, and sidewalks.
Public works projects have been governed by the Miller Act since 1935. This act requires all contractors awarded contracts in excess of a 100,000 dollars to have performance and payment agreements. Most states have enacted similar laws regarding public works projects generally known as Little Miller Acts.
Contractors must meet certain standards before they are issued any kind of surety bond. They have to show they have the character to be trusted with contracting responsibilities and pay their bills promptly. A contractor must have the ability and capacity to perform the job. He or she has to have adequate equipment and the necessary staff to complete the work. A contractor must demonstrate financial security and reliability.
Contractors do default, and the surety company is left with only a few options. It can contact the client and try to get an agreement that will allow a rebid in order to finish the job. Depending on the situation, the company may decide to give the contractors the funds necessary to complete the job. If the company does this, contractors must repay the loan with interest out of profits from the work in question. The company can also reimburse the client for any losses.
Once contractors default, they will most surely be dropped from their current surety provider and find it very difficult to get a bond from another one. When someone offers to repair a homeowner's damaged property, but won't produce evidence of a bond, the front door should be shut politely but firmly.
A contract bond is not exactly the same thing as an insurance policy. Insurance removes risk from one entity to a third one and compensates any losses incurred by an injured party. A contract bond is issued by a surety company to guarantee any debt incurred by another. Its function is to prevent loss in the first place. There are three parties in a contract bond, the individual hired for a project, the client who does the hiring, and the surety company.
There are three basic types of contract agreements. One is required when contractors bid on jobs. This guarantees the bidder will provide the other two types of agreements once the bid is won. A payment bond guarantees contractors will pay all the subcontractors and suppliers used to perform the job. A performance bond assures the client that the contractor will do the job according to the contract they entered into.
Other types of agreements surety companies issue include site improvement, supply and maintenance. A subdivision bond is issued to guarantee contractors will build improvements within a subdivision according to local rules and regulations. These improvements can include streets, waste management systems, and sidewalks.
Public works projects have been governed by the Miller Act since 1935. This act requires all contractors awarded contracts in excess of a 100,000 dollars to have performance and payment agreements. Most states have enacted similar laws regarding public works projects generally known as Little Miller Acts.
Contractors must meet certain standards before they are issued any kind of surety bond. They have to show they have the character to be trusted with contracting responsibilities and pay their bills promptly. A contractor must have the ability and capacity to perform the job. He or she has to have adequate equipment and the necessary staff to complete the work. A contractor must demonstrate financial security and reliability.
Contractors do default, and the surety company is left with only a few options. It can contact the client and try to get an agreement that will allow a rebid in order to finish the job. Depending on the situation, the company may decide to give the contractors the funds necessary to complete the job. If the company does this, contractors must repay the loan with interest out of profits from the work in question. The company can also reimburse the client for any losses.
Once contractors default, they will most surely be dropped from their current surety provider and find it very difficult to get a bond from another one. When someone offers to repair a homeowner's damaged property, but won't produce evidence of a bond, the front door should be shut politely but firmly.
About the Author:
When you are looking for information about contractor bonds Washington residents can pay a visit to our web pages online here. More details are available at http://insurewa.com now.
Enregistrer un commentaire