Contractor bonds are also a kind of surety Bond which are put in place to protect the interests of end users or consumers against damages incurred due to lapses in the services rendered by the contractors.
These bonds actually bind three different parties in a legal accord. The first party is the principal party, which includes construction professionals. The second party includes those who require the contractors to be bonded; and the third party is the Insurance company, which is the issuer of the contractor bond that guarantees the obligation of the contractor in the accord.
That is why; when you look at the dynamics of contractors bonding and insurance company,you realize the importance of this dynamics, which ensures the adherence of contractors to this accord. These bonds also ensure the adherence of construction professionals to the accord, and remove any possibility of non-compliance from the guidelines stated in the bond agreement.
According to the conditions stated in the bond; if the contractor fails to meet the conditions specified in the bond, then the end consumers can stake their claim on the contractor’s bond.
If you still want to know more about the various aspects of contractor bonds, you can also refer to the Infographic below on ‘Risk-transfer-with-construction-bonds’,to clear any doubts regarding these bonds, and the benefits you can derive from buying these bonds.
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