When a person or business is issued a performance bond, they’ve created a situation where they can be hired by individuals and businesses who can hire them without any fear. The existence of the surety means that the person who has hired the contractor doesn’t have to worry about the work they need not getting done. The company that has signed the surety promises to make sure the work gets done one way or another.
It’s important for both the contractor and the person hiring the contractor to realize that there’s a big difference between a performance bond and a security bond. When it comes contracted work, the bond deals with the completion of a specific task, not investments. There’s also a difference between the performance bond and insurance. The bond should never take the place of an insurance policy. If you’re hiring a contractor, you need to make sure they’re fully insured, licensed, and properly bonded. In addition to ensuring the work gets completed, the bond also means the company agrees to stay away from fraudulent business practices.
If you’re a contractor who wants to start your own business, you shouldn’t even think about trying to get started until you’ve completed the entire process of getting a performance bond California. You won’t believe how much easier it makes attracting customer. Just the existence of the bond means the individuals seeking the type of services you offer will feel better about taking a chance on your business. A start up contracting business will have a very difficult time surviving the first year without the bond. The performance bond creates an element of trust between everyone involved in the transaction process, even if they’ve never worked together before.
The performance bond does more than simply encourage people to hire your services for a project they need help with. As a contractor there will be times when you will want to participate in auctions where you have to submit bids on a particular project. Some contractors get a majority of their business through these types of auctions. They can be very lucrative. More often than not, the company conducting the auction requires each part to have a current performance bond before they will be allowed to submit a bid.
You shouldn’t plan on getting your surety bond until the application for your business license has been approved At this point you will want to contact a company that handles bonds for your type of business and start the application process. Application approval can take a few weeks, after which you’ll still have to get the paperwork notarized and make sure it has been properly filed.
If you violate the terms of the bond, you’ll be subjected to stiff penalties.
The SuretyEz professionals understand that a performance bond California is an important part of a successful business. They’ve made getting one as easy as possible at Suretyez.com
