Establishing an In-House Bonding Policy

In some recent blogs, we’ve covered what surety bonds are and why you need them as a contractor. In continuing that trend, here’s some tips on what you need to do internally in your office to make sure you obtain bonds when necessary. Use this list as a guide and add your own parameters for securing bonds.

• Set a limit at which bonds must be required. This may be a dollar amount or a percentage of a contract (ex.: all contracts over $25,000 or all subcontracts for 20% or more of the overall job).

• Include the following details in your bonding policy:
  • Type and complexity of the job
  • Duration of the contract
  • Bid spread
  • Subcontractor size and reputation
  • Government regulation requirements
  • Subcontractor’s experience with the type of project on the table
  • Subcontractor’s role in the contract

• Once your policy has been established, notify all subcontractors, the surety bond producer and the surety underwriter.

Still have questions on surety bonds? Contact Consolidated Insurance + Risk Management today!