Surety Coverage
Commercial Surety Solutions
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Surety Solutions for Construction Projects
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Understanding Surety Building Confidence in Every Contract
As a business owner in the construction industry, setting your business up for success while securing your projects is crucial.
Surety bonds provide protection for the project owner, contractor, or supplier if the bonded party does not fulfill their contractual obligations.
SURETY 101
Who’s Involved in a Surety Bond?
A surety bond involves three key parties: the principal, the obligee, and the surety.
Common Surety Bonds & Letters
Various surety bonds are available for construction projects, including bid, performance, and labours & materials bonds.
At the tendering stage of a contract, a Consent to Surety is commonly requested with a bid bond. This often sealed document, confirms that a surety company has committed to providing a performance bonds along other bonds, such as labour and material payment bonds, in support of a successful tender.
A Performance Bond guarantee’s that the contractor will fulfill the work as outlined in the contract.
This bond is commonly requested with a performance bond in contract agreements. This bond assures that all subcontractors and material suppliers will receive payment as specified in your contract.
THE PROCESS
The Surety Underwriting Process
Understanding the specific type and amount of bond required by the obligee in a contract is important before obtaining a surety bond. The application process typically involves:
01
Application
Involves submitting financial documentation and proof of prior project history, to prove your creditworthiness and ability to meet the terms of the surety bond. Additionally, you’ll need to provide project specifics covered by the bond.
02
Risk Analysis
The risk will be underwritten by MIC and assessed to bond you.
03
Bond Delivery
Upon approval, a sealed and signed bond from the surety will be issued for you to sign and deliver to the Obligee.
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