Benefits Of Our Labour And Material Bonds
Are you a construction contractor? If you are, you should already be well familiar with various types of construction bonds. When filing a performance bond, it is also possible to tack on other bonds, such as a labour and material bond. As a construction project owner, it is vital to implement this type of bond, when issuing your performance bond, as it will protect you even further. Below, you’ll learn more about our labour and material bonds.
An Overview Of Our Labour And Material Bonds
In order to get a better understanding of why you should issue one of these bonds, you should understand fully how it works and what it does. This is a type of bond, which is normally issued with performance bonds. As the name suggests, it helps to cover labour and material costs for construction projects. Below, you will find a list of expenses that are generally covered.
If the contractor fails to pay for these items as negotiated in the contract terms, the project owner will receive a payoff for it. You can see the importance of this bond, as a construction developer.
Protection for Project Owner
Many construction project owners will contract out the physical labour, material, and all other services that are required to complete a development project. The surety will ensure the owner that the project will be completed by the specified date and per the contract terms and agreement. The bond will also protect you in the event that the principal fails to pay for the labour and materials required for the completion of the project.
Benefits For The Contractor
It should be known that the project owner isn’t the only one that is protected, by this type of bond. Unpaid suppliers or contractors can also pursue payment, by using a lien and this bond. Although it is possible for liens to be levied with labour and material bonds, it helps to reduce the probability of their presence dramatically. Therefore, both sides of the arrangement should definitely seek our services, in order to protect themselves from losses.
The surety will guarantee the project owner that the subcontractor will fulfill their duties. If they fail to do so, then the project owner will have to file a claim with the surety company, at which time the surety will begin a full investigation. At the end of the investigation, the surety will make a decision of whether or not the subcontractor failed to carry out their duties. If the surety favors the owner, then they will be forced to pay out a penal sum, which is the total amount of the contract.
This will not be the end of it for the surety, because they will go after the subcontractor and enforce them to repay the penal sum.
File Your Bond Now!
Whether you’re a contractor or property developer, you will definitely benefit by speaking to an advisor at ConstructionBond for your labor and material bond. It is highly recommended that you begin exploring our options immediately, so you can keep your company safe from losses.