Construction project involve huge amounts of money, materials, time and effort. Because of this, both the construction contractor and the client who hired them need to be very careful with the work so that favourable results are reached. However, due to the nature of the construction work itself, it is very much possible for something to disrupt the process or worse – ruin it all together.
A natural disaster such as an earthquake could level an incomplete structure to the ground and waste all the effort and materials that went into building it. Another risk which can halt a construction process is the insolvency of the builders which can lead to disputes over who pays for what. If the job cannot be completed due to any reason, the client paying for the work might be faced with a difficult situation where they’re asked to pay for their client’s debts or incur a loss because of the incompetency of the building firm. This is where contractor bonds come in.
These contractor bonds basically protect the client from these kinds of situations and bind the building firm to deliver the result that they’re paid for. A California contractor bond also binds the contractor with surety; this grants them with access to professionals such as lawyers, structural engineers and even accountants for advice regarding the proceedings of the building process. Should a dispute arise over anything between the contractors and oblige, the contractor will be protected under the bond. Being a bonded contractor is especially beneficial for the building firm since this makes them easier to trust in the eyes of the clients, which basically means more contracts for them and more profit in the long run as well.