In a world of unforeseen events that can result in costly lawsuits and damages, managing risks is a must. People often look to insurance companies to find ways to reduce risk when investing in a house, car or expensive piece of art. Theoretically, paying just a small amount each month could protect you against a sudden financial catastrophe in the future. These companies may have the best of intentions, but in reality they are often far from ideal. Many companies try to deny your claims or delay payments for a long time, leaving you with a mountainous debt as you struggle to maintain your investments.
Standard liability coverage is often inadequate, especially in contract work. You are putting your faith in the contractor when you allow them to install an air conditioner or new power lines. There is no guarantee that the liability insurance of most reputable businesses will cover you when your mistakes result in thousands of dollars worth damages. Surety insurance is a popular way to protect your investment. This type of insurance, also known as surety bonds or bonding, is a unique way to control the distribution of funds in the event of an emergency. Surety insurance, which is also known as surety bonds, allows for a three-way agreement to be made between the customer, contractor and their bondsman. These bonds are more like bank loans than sudden cash. They have stricter guidelines, and everyone understands their responsibilities. Homeowners can hold contractors responsible and claim damages before a disaster strikes by avoiding the large corporations.
Public works also benefit from surety insurance. City and town governments depend on one overseer to supervise a large number subcontractors when building a statue, park or other municipal attraction. This primary job leader is often the only person who can contact the electricians, carpenters, and sculptors working at the site. This manager can hire out the work, and can also make agreements about compensation. However, he won’t be the person who receives complaints if subcontractors don’t get paid. Workers who are dissatisfied will go as high up as possible in the food chain and try to get the largest paycheck. In this case, the liability protection provided by the contractor will not save the city; only a bond that is qualified can do the trick. The township is able to activate the agreement and pay directly with workers, without any drama or lawyers.
If you’re building an addition on your house or rebuilding a town square, it is important to protect yourself by purchasing surety insurance.