Whether you are a new contractor just starting out, or you have been in business for many years, you undoubtedly understand the importance of a surety bond in New Jersey. The reality is: If you are turned down for surety bonds, you will quickly be out of business. Therefore, it is important for you to understand your obligations under surety bonds, so that you remain in compliance with the terms of the bond. By upholding the terms of your contract, you will earn the trust of the insurance company and be assured of future bonds, when needed.
Contract Surety Bond Terms
These bonds go under several names such as performance bonds, contract surety bonds, construction bonds and just surety bonds. Their basic purpose is to ensure that you complete the terms of a contract in accordance with its requirements. In order to bid on a construction project for any governmental body, whether municipal, state or federal, you will need to post the requisite bonds. These would include Bid Bonds, Performance Bonds, Payment Bonds and Ancillary Bonds.
Each of these bonds covers a different type of performance related to the completion of your construction contract, and each has its own terms that you must meet. A Payment Bond, for instance, guarantees that you will pay all suppliers and subcontractors, on a timely basis, on any job that you have been awarded.
By complying with the terms of your surety bond in New Jersey, you will be eligible for bonds on an ongoing basis, allowing you to bid on lucrative jobs. For further information, consult with an insurance company that specializes in this area of insurance.