Surety Bond Benefits Posted By : Ron Victor

Bonds play a major role in today's market. Bonds become more essential in construction industry for completion of their construction projects. Underwriting bonds involve great risk. But the surety company will write these bonds for the benefit of their customers. If bonds have been underwritten, it has following benefits.

• The obligee gets a guaranteed performance of the contract from the principal and the surety.
• These bonds enforce the contractor to complete the contract with in the stipulated time and contract money.
• This bond guarantees the payment from the obligee to the contractor and from the principal to the subcontractor.
• This bond ensures that the supplier will furnish the material and labor to the principal as signed in the contract.
• In default of the contract, the obligee can sue the principal i.e. the obligator and the also the surety.
• The obligee can enforce the surety to complete the contract with in the stipulated time and contract money in failure of the principal for completion.
• The underwriter of the surety company can provide financial, technical assistance to the contractor.

Contractor
A contractor is a person who undertakes the risk of completion of contract with in stipulated time and contract price. The contractor performs a contract for a price consideration. The contractor guarantees the owner that he will finish the contract with in stipulated time and contract value, through issuance of the bond.

In default of the contractor, the obligee will sue him against the court of law. This bond ensures the contractor has guaranteed performance of the contract.

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Surety bonds assure project owners that contractors would carry out the work and pay subcontractors, laborers, and material suppliers in agreement with the contract documents. There are basically three types of contract surety bonds.Making the correct choice to manage risk on construction projects and selecting the most responsible option to guarantee timely project completion are vital to a successful project.

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There are varieties of bonds available in the market such as Mortgage Broker Bonds, Surety Bonds, etc. Short term low return bonds are a safer way of investing your hard earned money, Companies and Government Issue bonds to meet their day to day operation.

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