For large projects, it's not uncommon to see builders investing in six or seven unique bond types to control risks and offset gaps in their insurance coverage. That's not surprising, since bonds typically protect the customer financially, where insurance protects your business. If you're not sure how to figure out which construction bond types you need for a project, you're not alone. The key to figuring out a good bond package is developing a relationship with a bond provider whose expertise allows the company's representatives to assess the whole project and recommend products.
Cover Performance, Payment, Maintenance, and More
Bonds provide robust protection for specific risks, but they are often most cost-effective when they are written for niche needs. That's why you often see six or seven bond types recommended instead of one or two comprehensive products. The result is a larger number of bonds that each have significantly lower risks of being needed, which is a bit counterintuitive if you are used to operating on insurance alone for your risk management needs. Bonds can cover anything from subcontractor payments to performance milestone achievements, so the right combination and the cost is sure to change from one project to the next. Working with a leader in the field is absolutely essential to streamlining the bond issuing process so you can get to work.