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Business Personal Bonds Benefits

writing and calculatorFor many companies, the investment in surety bonds is an essential one. These bonds help to provide protection for all involved. It ensures that the contract is completed in the event that the contractor (you) defaults on your promises. The project owner in these bonds, known as the obligee, obtains the services of the contractor, or principal and a contract is developed. The surety company then provides protection to ensure the contractor does his or her job according to the agreements in the contract. This protects the project owner from any type of financial loss.

There are several types of surety bonds. It is important for you to choose the right type of bond to have in place depending on the contract details:

Bid Bonds: This type of surety bond specifically provides protection in the bid phase. It helps ensure the contractor on the project will enter into that contract and secure performance bonds if they are given the contract.

Performance Bonds: This is a popular type of bond. It helps ensure that the contract is completed properly. It specifically provides protection for the project owner to ensure that the job is done according to the specific terms and conditions listed. This gives the project owner the peace of mind he or she needs.

Payment Bond: This type of project helps ensure the suppliers and all subcontractors on the project that the payment for the services provided will be made according to the details of the contract.

Ancillary Bond
: Ancillary bonds provide protect for the requirements of the contract considered integral to it, but may not be directly related to the performance. The bond ensures these tasks are performed as agreed under the contract.

Most businesses that are operating on a contract basis, no matter in which type of field, should consider the value of these bonds. In doing so, you give those who you will work with the confidence to enter into an agreement with you. These bonds work to lower the risk of the others involved in the project with you, making it easier for that company or project owner to work with you.

Is your business covered? Call McFarlin Insurance Agency at (410) 312-7800 for more information on Maryland surety bonds.
Posted 7:01 PM

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8325 Guilford Rd, Suite A
Columbia, MD 21046

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