Construction Projects

Why Contractors Insurance is a Must Have

One of the best things that a company can do for itself is obtained insurance for their contracting company. The major question is why contractors must have insurance. They need insurance to cover and protect them from the risks they face in their daily operations. Insurance for contractors is a type of insurance that helps to offer them protection for the survival of business as well as other things. Commercial insurance is another way to help protect a company from liability.

What Type of Insurance for Contractors should one buy?

General liability insurance should be one of your considerations as it protects the business as a whole. In theory, this insurance can protect you up to five million dollars for each occurrence that happens. It should, however, be noted that this amount and type of insurance is an example and that your coverage will be determined by the offered insurance and other situations that insurance company discusses with you. Liability insurance is different than a disciplinary bond for contractors, which is required in the event a contractor violates state law. Check out a contractor bond – Twitter page to learn more about the different type of bonds available. Roofing and Swimming pool bonds, for example, are two types of specialty bond required for contractors with these license classifications.

Who Will Commercial Insurance Cover?

Commercial insurance not only acts as Insurance for contractors but additionally as coverage for third parties. Therefore, if an accident were to occur it would cover things such as property damage, third party bodily injury, as well as personal injury coverage.

What are the advantages of having insurance?

Regarding benefits for having contractor insurance, government or state projects require you to have a certificate of insurance to work for them. In addition to that, you will find most people won’t hire a contractor that isn’t insured. The biggest reasons associated with this are the financial risk that is carried. No one wants to hire a contractor due to the financial risks that are involved. If they were to hire an uninsured individual, they are ultimately responsible for any damage or injury that may happen.

A government agency will not hire a person that has this level of risk. Along with that, any well-informed home or business owner will pass over an uninsured individual performing work for them. There will very likely be no one that is willing to hire a person that has such large risks associated with them.

With that in thought, you can see why it is so important to buy insurance for contractors. There are a variety of policies available. This means it is easy for you to obtain insurance that works for you. So you should be able to find coverage that meets the number of people working for you along with other requirements.

The worst possible business decision you will ever make it to neglect obtaining commercial insurance. At any time that you don’t have insurance; you are losing work and other things. One such thing could be assets that you have. It is very important that you look over your current coverage, or if you have none, then you purchase it at once.

Construction Projects

Securing a Contractor Bond to Bid On Government Projects

Securing a Contractor Bond to Bid On Government Projects

Are you a contractor who is interested in applying for government projects tenders? Did you know that the government requires you to file a bid bond upon winning the tender? Most contractors are required to prove their financial capability and capacity of undertaking government projects by filling contractor bonds or performance bonds. The bonds are mostly used as security for the bid proposals. The bonds are obtained from a surety firm. If you are unable to complete the project, then the surety firm takes all the risks of finding another qualified contractor to finish it before the lead time. This article will provide all the information about bid bonds that you definitely need to know.  Here is some help on bidding on a government construction project.

Types of contractor bonds

Generally, there are 4 types of performance bonds, namely:

  • Bid bond– This is a type of contractor bond that makes sure that you as the bidder will enter into a contractual agreement and will provide all bonds if you are given the contract.
  • Payment bond– This is the bond that makes sure that all subcontractors and other suppliers are paid for all the work they have done within the contract period.
  • Performance bond– It ensures that all the work according to the terms stated in the contract.
  • Ancillary bond – it makes sure that all the requirements of the contract are adhered to.

How to obtain a contractor bond helping you bid for government projects

If you want to work on government projects, then you need a contractor bond to make sure that you will complete the project perfectly according to the contract. In the US a contractor is supposed to have a bond for any project above $10000. But for you get a contractor bond, you must first be registered and licensed by the relevant government agencies that regulate contractors. The license is granted after a thorough review of your professional competence of the owner plus those of his employees.How much does a contractor bond cost?

There is no uniform cost of contractor bonds. They vary depending on the type, size, and rate of the bond that is applicable to you. Contractors can make of a bond calculator to estimate the value of their bond. It is important to note here that not every contractor will qualify for a bond.

It is possible for contractors to withdraw a bid for a project without losing the bond, especially when the bid is not opened.

Contractor bonds will surely convince your clients that you are competent and have the necessary resource to complete their projects timely.

Contractor Bonds

Guarantee Your Construction Project with a Contractor Bond

Guarantee Your Construction Project with a Contractor Bond

As a contractor there are various ways you can find creative, equitable and solutions in case a construction contractor default. This has been made possible by use of bonds. A bond represents a relationship of business that offer construction contractor assistance if they run short of finances and other operation related difficulties.

Why contractors default?

Reasons why contractors default include the following

1) Not all construction projects are foreseeable or manageable. This means that there are those projects that are more risky as compared to others, and therefore contractors find it difficult to determine best projects which are save.

2) Economic suffers also takes part. At some point in time economy takes radical change that causes huge losses to construction projects. Especially during recession most of the construction projects collapse or stop.

3) Changes of environment or jobsite conditions. This slows down construction process. In most cases contractors work in contract terms which have time schedule. Due to environmental conditions this time schedules are likely to change.

4) Construction is one of the industries affected by managerial problems. Contractors are human beings and therefore make decisions which sometimes are wrong. Wrong decision may cause the huge sums of money and therefore default.

How bonds work in case of contractor default

Contractor default causes huge losses to all stakeholders involved. Though this affects the involved in different ways, it can delay or even stop the whole project. In this way, bonds are used to secure the successful outcome of the construction project. This is because most constructions that involve huge sums of finances are backed using bonds.

According to research between 2012 and 2013, it shows that default hurts contractors. This is especially when it leads to huge bond claims. By use of bonds, it provides for a number of strategies ways to resolve these cases. Contractors can therefore find a creative way of avoiding such defaults. In simple terms use of bonds not only save construction projects but also save contractors.

Clients who invest a lot of money in construction, normally use bonds as backup in times when contractors default. They the bonds as security of their money invested in construction which are under control of the contractor. In resent research, it shows that in developed countries this has been the best way to ensure that construction projects dedicated to contractors are achieved within time schedules.

For both contractors and investors in constructions, the best option to secure resources, money, and time and to be sure of your construction investments. Use bonds to back them up. It adds value to your construction projects and reduce losses in case of contractor defaults.