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Explaining about Surety Bonds-MEY’S INSURANCE SERVICES...

Performance Bonds – Provide financial security to the Oblige (project owner) from the Surety in the event that the Principal (contractor) is unwilling or otherwise fails to fulfil their contractual obligations.Do you want to learn more? Visit Surety Bonds-MEY’S INSURANCE SERVICES Payment Bonds – Provides the Oblige with guarantees that material suppliers and subcontractors will be compensated by the Surety if the Principal defaults on his payment commitments to certain third parties, avoiding project delays and mechanics’ liens. Surety underwriters have the difficult and ongoing task of evaluating Principals requesting a bond. Companies who depend on bonding to win projects realise how important it is to build and maintain a positive relationship with their Surety companies. Before issuing a bond, surety underwriters must put the Principal through a stringent underwriting procedure, and they will continue to track the progress of the Principal’s projects for any warning signs of potential default. Firms applying for a surety bond must have the most comprehensive details in any “insurance” application process. Companies that would need bonds should have a current portfolio of the necessary documents on hand to make the underwriting process easier and faster. Bid Bonds are usually issued at no expense or as a bonus in exchange for the Surety’s underwriting of the Performance Bond if the contractor is awarded the project. Performance Bond premiums or fees can vary from 0.5 percent to 2.0 percent or more of the contract’s final...