Helpful Home Improvement Tips: Bonding
Find out about one of the ‘big three’ that every legitimate contractor must have: bonding.
Hello everyone! My name is Tyler Bohlman and I’m here to answer some of the most common questions that everyone has about dealing with contractors, general home improvement advice, and financial transactions with contractors also any other questions that you in the audience might have. And today I’m going to talk about the third part of the “big three” of contractor must haves and that’s bonding.
Read any “what your contractor must have” checklists online and you’ll always read “licensed, insured, and bonded”. We have covered licensing and insuring, and now we are going to talk about bonding.
Of the big three, bonding is probably the one that is used the least. A financial bond, or surety bond, is an instrument guaranteeing that the work done by the contractor will be completed on time and done to your satisfaction. It often times gets confused with insurance, but it’s not, it’s actually closer to credit. The bond limit will be set before the work starts, and is usually for a set amount. The bond will be valid up to that set amount, though it is usually sufficient to cover the scope of the job at hand.
So if it’s one of the big three, why don’t contractors use it? It costs money to be bonded and contractors feel that often times they don’t need to be bonded because they stand by their performance anyway, or have other (usually cheaper) options of guaranteeing their work. I wouldn’t necessarily call it a red flag if your contractor isn’t bonded, but if you are concerned about their ability to complete the job, be sure and find other ways of securing your money when agreeing on your contract.
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