What can you tell me about "bonding"

Discussion in 'Business Operations' started by dirtybiz, Feb 1, 2008.

  1. dirtybiz

    dirtybiz LawnSite Senior Member
    from MT
    Posts: 255

    I have a large project coming up and they want me to be bonded. I don't know alot about it, what can you guys tell me about it? My assumption is that it is a security for them that says I am going to do the work promised, and not flee the country w/their deposit?? Thanks.
     
  2. retrodog

    retrodog LawnSite Silver Member
    Posts: 2,421

    pretty impressive equipment line-up.....I think it is with your insurance. When I get asked for a bond, I just call my insurance company and she sends stuff over. Don't really know what it is for, I assume it lists the city, or whoever you are working for as payees on your insurance in case something happens. She never charges extra for it, so I don't pay that much attention.
     
  3. retrodog

    retrodog LawnSite Silver Member
    Posts: 2,421

    Some cities require you to buy a bond with them. Again, I think it is just from their insurance company.
     
  4. grass-scapes

    grass-scapes LawnSite Bronze Member
    Posts: 1,552

    Bonding is a type of insurance which assures the customer that you will complete the job. It pays to have the work completed by someone else if you fail to do so.
     
  5. BUCKEYE MOWING

    BUCKEYE MOWING LawnSite Bronze Member
    Posts: 1,169

    What he said..LOL....it's really that simple..dosen't cost much to have yourself bonded up to xxx amount of money..check with your insurance co.
     
  6. dirtybiz

    dirtybiz LawnSite Senior Member
    from MT
    Posts: 255

    Thanks for your quick responses, that's pretty much what i thought, but wasn't quite sure as i have never had to deal with it before. Thanks again.
     
  7. dirtybiz

    dirtybiz LawnSite Senior Member
    from MT
    Posts: 255

    Anyone have any idea as to what they typically charge for performance bonds. Somebody I talked to said they are typically 3% of project and go down w/the size of the project. I submitted paperwork today, but won't know for a good week or so, but need to sign contract asap, but don't have any money built into bid right now for bond premium! Anyone who has experience w/performance bonds please enlighten me! Thanks
     
  8. AintNoFun

    AintNoFun LawnSite Bronze Member
    Posts: 1,807

    theres a lot of variables - credit rating, assets, do they want a maintenance bond 1, 2, 3 year? its really hard to shoot out a number. I would call around to a few different places and get quotes as they do vary. We get cheaper rates with certain companies on different bonds...



     
  9. VBsnow

    VBsnow LawnSite Member
    Posts: 241

    Western Surety, if they operate in your state should be your first stop. You had better hold off bidding this job until you have an idea of the availability and cost of this bond.

    To all of the people who offered advice to this fella:

    Except for one they were all wrong. there are too many types of bonds. The "loss payee" status that was ref. to is actually an additional insured status or certificate holder, not a bond. Landscapers usually deal with performance or bid bonds. I have spoken to two people this week that have had an unknowledgeable property manager jsut ask for a bond. never said what kind. So we give them a theft bond for just over a $100 and send them on their way. It would be better to have the bond request in writing from the person requesting it before you call the insurance agent.

    Hope this helps.
     
  10. Meehan47

    Meehan47 LawnSite Member
    from PA
    Posts: 33

    I am inquiring about becoming bonded. Currently I am in the process of submitting a proposal to a commercial account and they want my company to become bonded. However, they did not specify the bond requirements. How long does it typically take to become bonded?

    If I do not receive this contract, must I keep the bond?
     

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