Who Pays for Surety Bonds
In the construction industry, you have probably heard of surety bonds that help insure that construction projects go smoothly for everyone involved. However, it may be a bit of a gray area when it comes to determining who pays for these bonds. Here are some basic guidelines on who buys surety bonds in New Jersey.
A contracting firm is usually the ideal party to get the bonds before the project begins or gets accepted. This is because many of the bonds are set up to protect the firm in the event that there is a problem with the contractor, the supplier, subcontractors or the client. Since the firm is often the go-between, they should be the ones to make sure that they are protecting themselves.
Getting surety bonds doesn’t only protect the firm, either. Based on the nature of the various types of bond, once the firm gets them it protects virtually everyone involved in the transaction. Some bonds ensure that people will be paid for their work and supplies, where others ensure that the work done will be up to standards.
When it comes to surety bonds in New Jersey, a contracting firm really shouldn’t skimp. These bonds can keep a business going when there are problems with almost any type of contract, making them a lifesaver for some.