As a construction contractor, you’ll be required to familiarize yourself with how a constructions bond works. These bonds provide you with reassurance, but they’re also required in the mass majority of cases. Many individuals have heard of performance bonds and bid bonds, but they’re not entirely sure how the process works. Some will question the length of time it will actually take to obtain the bond. In order to ensure that you’ll able to obtain the bond, within a reasonable amount of time, you should familiarize yourself with the process and its duration. More information will be provided below, so you can do just that.
Gathering The Required Information
Before attempting to start the application process, you will need to figure out precisely what is needed. Most of the formalities that need to be satisfied by the contractor to obtain bonds can be found on the surety frequently asked questions page.
Since each case is unique, the requirements could very well vary substantially. In some situations, you may need to acquire a large number of bonds, whereas other situations may be a little more lenient. If you’re required to obtain a large number and higher quantities, the process will be much lengthier than you could’ve imagined. However, if the requirements are minute and minimal, you won’t have to wait as long, before you’ll be able to obtain your bonds.
One of the first steps of getting approved for a bond is the prequalification process. This can be a very lengthy process, since it involves devising a business plan, providing the surety an employment and personal history, and proof that you can perform the obligations per the contract, in a timely manner. If you are familiar with this step, the process will go smoothly, but this is your first time applying for a surety bond, you will need to come across several roadblocks along the way.
Once the principal has provided the underwriter with all the information required for prequalification, it would become their sole responsibility to validate the information. The underwriter may also request a personal meeting with principal, so they can make a more informed decision on whether or not to approve the bond. This may not be necessary, if the principal has done business with the specific bond company in the past.
Receiving The Quote
Once you’ve completed the steps above, the surety company will provide you with a quote which will outline the full cost of the bond. To learn more about how much construction bonds cost, click here. Depending on the type of quote and the quantity in question, it could take a few minutes or a few days, before you’ll receive a quote. The good news is that once you’ve made it this far you’re almost finished with the process. If you accept the quoted price, you will be able to make your payment right away. If not and would prefer a lower price, you will need to restart and repeat the process with other surety companies. Once the payment has been made, the surety will complete the bonding process and mail the bond to you.
When it comes down to it, the duration could vary significantly. In some cases, the contractor will be able to obtain their bond within a matter of hours. In other situations, the wait time may be a little lengthier. By knowing precisely what is required ahead of time, what surety bonds cover, and by relying on a familiar surety company like ConstructionBond Canada, you will be able to breeze through the process much quicker.