The term may give some the wrong impression. It’s largely misunderstood. Bernard & Fabien has several bond solutions to suggest to tradespeople and general contractors in construction as well as to service companies, carriers, and for environmentally sensitive sites.
In and of itself, a bond is a financial tool more so than an insurance product. It’s a type of endorsement or guarantee that exists for general contractor agreements (tenders, commitment letters, surety, materials and labour, maintenance and pre-qualification letters). There are also commercial bonds for a variety of applications.
To obtain a bond, whether it be a contract bond or a commercial bond, you will have to provide information about your company by completing a form and, if necessary, submit supporting financial documentation.
This letter is an undertaking by a designated individual (the guarantor) to emit to a beneficiary a performance bond, materials and labour, as determined by a tendering process.
This replaces a certified check or a bank letter. A bid bond guarantees that a general contractor will undertake a contract with the project owner if the contractor’s bid is accepted.
This type of bond guarantees the project owner that the contract will be done to the conditions specified in the contract. Once the work is complete, a maintenance bond could come into effect.
Commercial bonds are commonly used in the following situations:
- Bonding licenses and permits
- Office of Consumer Protection
- Permits for trade and road vehicles
- Excise tax
- Lost documents
- Gasoline tax
This guarantees payment of subcontractors and suppliers by the general contractor.