Canada is running rampant with construction contractors and these individuals are undoubtedly able to gain massive profits, if they can secure the right jobs and projects. Of course, in order to do so, they’ll first need to obtain and pay for their construction bonds. Many Canadian contractors already own construction bonds, but they’re worried about them expiring in this future. Is this a possibility? Within this guide, you will learn all about the expiration of construction bonds.
Many construction contractors are new to the industry and have not be in the game long enough to know whether or not bonds expire. The truth of the matter is that construction bonds such as performance bonds do indeed expire. They work very similar to drivers and business licenses. Eventually, these bonds will expire and become invalid. This is why it is essential to know precisely when the bonds expire, so you can renew them, before it is too late.
Now that you know for sure that these bonds can expire, you need to know when they’ll expire, so you can be prepared to react immediately. The truth of the matter is that the majority of construction bonds will expire within a year of their issue date. This is why contractors are typically required to pay for their bonds on an annual basis. Of course, there are some circumstances, in which bonds may remain valid for a slightly lengthier period of time.
If a specified term was agreed upon ahead of time, the bond will last for a longer period of time. This is exactly why it’s best to understand and realize why some specific bonds are required for contractors as not every construction project has the same deadlines. With this in mind, you will need to check the specifics of your bond to determine, whether or not a specified duration has been set in place.
As a contractor, you will be expected to apply for a surety bond, which can end up being a lengthy process. Once you meet all of the qualifications, you will receive an immediate approval for a surety bond. It is important to note that the bond will not be validated until all three parties involved sign the contract, upfront premium is paid in full, and the document has been notarized.
The day that these requirements are met will be known as the issuance date, which means that the premium will be due on the day hereafter. To know about commonly asked questions about surety bonding, you can checkout the FAQ section on our website. There you will be able to find any information that you will need to be aware of to successfully apply to become a bonded company.
In order to keep your construction bond valid, it is absolutely essential to renew your bond, within a reasonable amount of time. The good news is that the renewal process is truly uncomplicated and can be completed relatively easily. Before the expiration date, you should make sure to submit your annual payment. Once the payment has been received and processed by the surety company, your bond will be renewed for another year.
If at any time a claim is made on your surety bond, there is a risk of cancellation. The surety company will initiate a thorough investigation to determine the legitimacy of the claim. If the claim is relevant, then there is a potential risk for the bond being immediately terminated. Your business license or permit may also be suspended at this time, so it is best to avoid these actions being taken against your company at all costs.
When it comes down to it, your construction bonds in Canada can expire and allowing them to do so could be very detrimental to you, your company and your company’s employees. In order to ensure that your company continues operating at maximum efficiency, you need to maintain the validity of your construction bonds. Remember that most bonds will expire after a year of the issue date. Be sure to pay the annual fee, before this date, so your bonds will remain valid!