If you are a project owner looking for a way to ensure that your contractor provides the agreed-upon services, you will want some type of assurance in the way of a bond. California surety bonds can protect your investment, in terms of both time and resources, in a project. All the while, a California surety bond helps ensure that the other party is held responsible for their end of the contract.
If you are engaged in a project that uses any amount of taxpayer funds, a surety solution is required. This is done to minimize the risk that the government and its taxpayers take on. If you are the owner of a privately funded project, you are still able to issue certain bonding and surety requirements upon your contractors and their subcontractors. Keep reading to learn how you can obtain bond services of California and protect your investment.
California Bonds Explained
Sureties are meant to be an agreement entered into with a third party. The bond is an assurance to the project owner that the contractor will abide by terms of the contract that it enters into with the other party. A contractor can also make it a requirement of their subcontractors to obtain a surety where the contractor becomes the owner and the subcontractor is the principal. It is important to remember that California surety bonds are not financial securities. Rather, they are typically bonds issued by an insurance company. They are a way to mitigate any risk associated with contractors walking off the job before the project is complete.
Companies that issue sureties operate on a different business model than that of traditional insurance companies. Such a bond is meant to prevent any loss from occurring, while traditional insurance is designed to cover losses as they do occur. The bond will act as a pre-qualification on the part of the contractor that is based on the strength of their financial balance sheet and their overall experience in the construction industry. The premium that is paid for the surety will depend upon how likely it is that a claim will be issued, and it also includes a fee for the pre-qualification process. That stage of obtaining a bond is comprehensive in scope.
Beginning the Process
If you are ready to obtain a surety, you will want to begin by contacting a professional agent that is licensed to distribute them. Most surety companies hand out bonds via an agency system, and only those agencies that specialize in contract surety are invited to participate. NFP is one of the largest bonding brokerages in the US and can handle this process for you in California. As surety professionals, we work with both project owners and contractors to ensure that proper bonding requirements are met. Call us for bond services in California today, and let us shop your bond for you.
When you work with a professional bond agent, you will receive solid business advice. The agent will guide the contractor through the process, including conducting a thorough review of the project contract. If another consultant needs to be brought into the process for any reason, the agent will be able to arrange that as well.
Choosing the Right California Bonding Agency
There are more commercial bonding requirements in California than in any other state, making it critical to select the bonding agency with the experience and expertise you need to address your bonding needs properly. Not every bonding agent is well suited for all types of projects. Some can only handle small projects, for example, while others specialize in mega projects. We are an agency that can handle virtually any size project, large and small, with equal precision. Regardless of the agency that you choose, there are five key things to consider before making your selection.
- The company should be well respected throughout the construction industry and be known as an agency that operates with the highest standards of integrity.
- The bonding agent that you choose should demonstrate a sincere interest in working to ensure the success of the contractor. Remember that the goal here is to prevent any type of significant loss throughout the project.
- The company that you choose ought to have a proven track record when it comes to developing positive relationships with its underwriters.
- It is important that the bonding agency has in-depth knowledge and understanding of currently accepted financial and accounting procedures specific to the construction industry.
- The surety bonding company that you select should also be able to advise on all matters related to construction contracts, subcontracting issues and items related to contact law.
This should give you the basic information you need to get started on the process of obtaining a bond. If you have any questions, you always welcome to contact us for a quick response.
How to Get Bonded in California
Every California bond is prepared on a specific surety bond California form, as prescribed by the California entity requiring the bond (known as the obligee). Below is a list of commonly requested surety types in California. There are more commercial bonding requirements in California than in any other state.
Same-day service is available and quotes are free. Request your bond quote now by completing our online application or if you prefer, just call us. We are the premier surety bond company in California.
- Appeal Bonds
- Auction Company
- Bad Credit
- Business Partner Automation
- Car Title
- Car Wash
- Construction Bid
- Construction Performance and Payment
- US Customs
- California Dealer Bond
- Deferred Deposit
- Durable Medical Equipment
- Employment Agency
- Escrow Agent
- Escrow Company
- Federal Bonds
- Fidelity Bonds – All Kinds
- Immigration Consultant
- Insurance Broker
- Insurance Adjuster
- Legal Document Assistant Bonds
- Lost Cashier’s Check
- Lost Instrument Bonds
- Parking Lot
- Mortgage Broker
- Mortgage Lender
- Notary Public E&O Insurance
- Payday Loan
- Private Investigator Bonds (P.I.)
- Process Server
- Professional Photocopier
- Public Adjuster
- Registration Service Bond
- Surplus Lines Broker
- Sales Tax
- Tax Preparer
- Tax Preparer E&O Insurance
- Defective Lost Title (defective title, lien)
- Unlawful Detainer Assistant (no credit check)
- Utility Deposit