The term “bonded” is often thrown around when it comes to hiring a contractor. Many are unsure what it means for a contractor to be advertised as bonded. We have simplified the term for you, including what type of bonds are needed for a specific job and how to get bonded if you are a contractor.
The bonds that contractors obtain are requirement for the issuance of an active or reactivation of a license, and for the maintenance of an actively renewed license. There are a variety of different bonds that contractors can have. State and local governments typically require contractors to have a contractor license surety bond but there some require a fidelity bond.
Contractor License Surety Bonds
This type of bond protects the public and guarantees contractors will work according to their license and guarantees their work performance. Any failure to abide by the license can result in a claim and fine the contractor will be forced to pay.
Fidelity Bonds
Unlike a contractor license surety bond, fidelity bonds offer no guarantee. They are simply an insurance product that provides protection against employee dishonesty.
General Contract Bonds
These type of bonds allow contractors to perform public work and guarantee their work will be completed based on the agreed contract. Fees and claims are also the case if the agreed terms are not met.
If are a contractor in need of securing a bond of any type, you will first need to conduct an online application for approval. If you have strong CPA business financials and experience in the field, your weak credit history will likely be overlooked in obtaining a bond. Your weak credit history typically won’t affect you when you are trying to obtain a fidelity bond.
Perry & Carroll is available to help answer any of your contractor bond questions. Contact us today for all of your personal and commercial New York insurance needs.