Surety Bond Hawaii
Sureties issued in the state of Hawaii are similar to those written in most other states in the US and are available for purchase by professionals in virtually every kind of industry practiced in business today. Bonds are often required by hiring companies as a guarantee of contractor performance, and of compliance with any rules or regulations that might pertain to the work being performed.
One of the most common types of bonds, which most people are probably aware of, is the license and permit bond. Most homeowners have needed to hire a professional person like an electrician or a plumber to do work, and have noticed that these professionals are licensed and bonded to work in the state of Hawaii.
What this means is that the contractor has applied for a license to provide professional services within state borders and has completed some predetermined level of that makes them qualified to do so. The bonding part of those credentials means that the contractor has purchased a bond that has a certain dollar value attached to it, which a homeowner might claim against if the contractor provided shoddy workmanship or otherwise unsatisfactory services.
In essence, bonding is a contract agreement between three parties: a hiring company known as the today, and learn how to get bonded in Hawaii.
How Does a Hawaii Bond Work?
Surety bonds work like the way that insurance functions. The insurance, in this case, is provided by the surety company, which is obliged to pay out a sum of money equal to or less than the face value of the bond itself, depending on the amount of any claim advanced by the obligee. The obligee seeks to protect itself against malpractice or fraud on the part of the principal by requiring that principle to purchase the bond.
If the principal then defaults on the terms of the bond, failing to live up to agreed-upon stipulations, the obligee would claim the bond that the surety would initially pay. But the principal does not get away so easily — when any claim is made against the bond, the contractor would legally be required to reimburse the surety company for the full amount that the organization had to pay out to the obligee. From this, it can be seen that there is a very solid balance to the agreement, which makes bonding an effective way of ensuring that professionals live up to the terms of work they agree to perform for an employer.
Types of Surety Bonds
As mentioned above, the very most common type of bonding type is probably the license and permit bond, which is sold in virtually every state in the country, and to many different kinds of professionals. Overall, however, bonds fall into two major categories, one being commercial bonds and the other being construction or contract.
Within the category of construction bonds, there are subcategories comprised of performance bonds, bid bonds, supplier payment bonds, site improvement bonds, and a few others. Virtually all other kinds of sureties will fall under the commercial category, which has hundreds of different types of bonds under its umbrella. The biggest subcategories within the commercial area are a court, public official, fidelity, fiduciary, tax bonds and the aforementioned license and permit bonds.
Industries that Require Bonding
The two biggest users of bonding in this country are unquestionably government organizations and the construction industry. In the case of government organizations, from town level agencies on up to the federal government, all of these bodies must protect taxpayer funds and must account to their constituents for how those funds are spent on various projects.
That being so, there has to be some kind of guarantee that individuals hired on government projects will live up to the details and terms of any work required, and will not attempt to defraud the government or the taxpayers. In many cases, precise procedures must be followed by government agencies for the hiring of professionals who will work on major projects, and requiring bonds is generally one of those requirements.
In the construction industry, there can be any number of private contractors working on large construction projects, and if there weren’t some means of assuring quality workmanship and compliance with standards, chaos would quickly result. To handle all the activities and procedures that must be carried out to make a construction project successful, it’s more than likely that all contractors on the job will be required to be bonded for work.
How to Get Bonded in Hawaii
For all of your bonding needs, the one company you should look to first is NFP, a trusted and respected financial organization authorized to sell all bonding types throughout the country. Whatever type of bond you need, you can apply online to expedite the process and have your application promptly reviewed by our team.
Assuming that you are approved for the bond, an indemnity agreement will be drafted with any terms required by the obligee as well as the dollar amount of the bond itself. This indemnity agreement will be mailed to you, at which time you can then sign it and have it notarized by a public official before returning it. Once the signed and notarized agreement has been received, the actual bond will be issued, and you as a contractor are covered. To get started, contact our office today.
Our team provides affordable Hawaii surety bonds and fidelity bond insurance. Every bond is prepared on a specific Hawaii bond form, as prescribed by the entity requiring the bonding (known as the obligee). Apply for your bonding solution now by completing our online bonding app. For more information about surety bond Hawaii, feel free to call our office. We’ll answer any questions you may have.