Are you familiar with the term “surety bond”? If so, you should have some idea of their importance. Contrary to belief, surety bonds are much more than a written guarantee. They are a secure form of protection from fraud. As consumers, it is crucial to know how to protect ourselves from becoming victims of fraud. One way you can do this is by only working with service providers and contractors who are “bonded”. When a contractor is bonded, they have been deemed reliable, reputable, and in good standing in the community, all of which have been verified by a surety company, insurer, or underwriter.
Fulfills Business License Requirements
In Canada, to obtain a business license in some industries, the company, organization, or individual must be bonded. As mentioned above, the surety bond license requirement is a form of fraud protection for consumers. While many applicants may complain about the bond requirement, Canadian officials know the high potential of consumer fraud. If you are trying to obtain a business license in Canada, you should appreciate the fact that the government is protecting consumers from fraud. While you may have a lot of faith in your company and would never result in fraudulent activities, the future of your company and employees is unsure.
Fulfills Permit Requirement
Some commercial projects require a government permit. High investment building, construction, and government projects are just a few examples. Since a lot of money is involved in these projects, the Canadian government demands a surety bond to be effective. The surety bond must be activated before the project can even get off the ground.
Permits are very commonly utilized in the construction industry. In these cases, the permit helps the government ensure all predicted changes to a structure or building meet the Canadian building codes. The permit also helps to protect the safety, welfare, and health of the public. The parties involved in the project must obtain a permit in advance. But, before the permit is issued, a permit bond must be obtained from a reputable surety company.
While the permit ensures all parties heed to the building and zoning codes, the construction project surety bond guarantees the contractor will comply with the Canadian applicable regulations and laws.
Builds Customer Base
Contrary to belief, many consumers in Canada understand the importance of a surety bond. In fact, most of these individuals refuse to work with service providers that are not bonded. If you have been a business owner for a long or short time, you will need to be bonded. This is especially true for service providers that are new to their markets. Since consumers refuse to hire service providers that are not bonded, it will be impossible to build your customer base if you do not heed to the recommendations.
A surety bond is not always a requirement to obtain a business license in Canada. However, it is in the business’s best interest to get bonded. Once you are bonded, you will be able to display this information on your company website. It will not take long before you see your customer base start to grow.
You’ll be Administering A Trust
There is always a chance that you’re going to become the administrator of a trust. This will happen in the courtroom and you should know that it can be a big responsibility. Once you’ve been put in charge of the trust, you have to go above and beyond to make sure that things are handled properly and legally. If something goes wrong, you’re going to get into big trouble. And, you should know that the court wants to make sure that you’re going to live up to your end of the bargain. This is why they’re going to require you to obtain a fiduciary bond.
As a fiduciary, you are going to be a position of trust. With this in mind, the bond is there to protect the other party. You will be dealing with the monetary issues for the party in question. To prevent fraud and embezzlement, you will be required to obtain a fiduciary bond. If you’re going to put a fiduciary in charge of your finances, you should force them to obtain this type of bond. Remember that acquiring a bond doesn’t have to be too difficult. You need to make sure that you’re working with the right company so you can acquire the bond without jumping through too many hoops.
You’re Entering Into A Contract
Are you looking for work for your company? If so, you’ll need to go out there and place bids on projects in your respective province. Once you’ve done that, you’ll likely receive comments from possible clients. Before you can begin working on the project in question, you’ll need to enter a contract with the company in question. And, you’ll need to acquire a contract bond. There are several types including payment bonds, bid bonds, and performance bonds. Remember that each contract bond will ensure that something will be completed.
When you acquire a payment bond, you’re agreeing that your company will pay its suppliers and subcontractors. If you do not, they can file a surety bond claim against your payment bond and seek compensation. Simultaneously, you’ll need to acquire a performance bond. This is the most important bond associated with contracts. It ensures that your company is going to fulfill its duties. The performance bond guarantees that your company will fulfill the terms set forth in the contract.
For instance, you may agree to get the job completed in a specific period. Or, you may agree to other stipulations. Either way, the performance bond gives the client peace of mind that you will complete the project as promised. If you’re going to be entering into a new contract with a client, you will need to obtain a performance bond.
You’re Going To Court
You never know when your company is going to be taken to court. There is a chance that you’re going to be sued by an unhappy client. Or, you might be required to take an employee to work. When this happens, you’ll be required to jump through numerous hoops. For instance, you’ll have to acquire a reliable lawyer to defend your interests. Simultaneously, there is a good chance that you’ll be forced to obtain a court bond. There are many court bonds and you’ll have to obtain one or more of them.
One of the most common types of court bonds is the cost bond. This bond is used to confirm that your company will be able to pay all court expenses. In most cases, you will only need a cost bond when you’re filing a complaint. In this type of situation, your company will be considered the plaintiff and you’ll need a cost bond. When obtaining a cost bond, you’re saying that you will pay court fees, copy fees, attorney fees, and all fees associated with the court case.
Depend on the situation you’re dealing with, you may need to obtain a Replevin bond too. This type of bond gives you the ability to take property that belongs to the defendant before the trial begins. However, you are agreeing that you will return the property if the defendant wins the court case. Remember that this bond is associated with personal property.
You Want To Protect Your Business
While you’re at it, you should know that surety bonds can be used to protect your business. There are certain bonds that will provide your business with an extra layer of protection. This is where the fidelity bond enters the picture. This type of bond is optional but many Canadian business owners believe that it is essential. After all, the fidelity bond is going to protect your company from theft, embezzlement, and fraud. You’ve done everything you can to grow your business. You cannot let it get destroyed by a shady employee.
You may screen your workers thoroughly before adding them to the roster. However, you need to understand that some people will slip through the cracks. With this in mind, you need to take steps to ensure that your business is protected from shady individuals. If someone embezzles from your company, it could result in an untimely bankruptcy. You can avoid such problems by acquiring the right fidelity bonds.
If the illegal activity is not covered by your company’s conventional insurance, you can acquire additional protect with fidelity bonds. You can customize the fidelity bond to suit the needs of your company. For instance, you can use the bond to cover all of your employees. This will likely be more expensive. You can cut the costs by covering select employees. If you offer benefits or pensions, you should protect these things from fraud by acquiring a fidelity bond.
Either way, using surety bonds is one of the best ways to protect your business. If you’re having difficulty acquiring a surety bond, you should get in touch with us. We’ll help you find a good surety provider so you can get the bonds you need right away. We’ve been in the industry for years and have good relationships with the best providers.
You’re Making A Bid
At the end of the day, you should know that surety bonds can be used in many situations. Sometimes, they’re required by the client. Other times, you’re acquiring a bond in hopes of protecting your company. When you run out of work, you’ll need to go out there and seek out new work. This can be tough since you’re going to be competing against other Canadian companies. The good news is that you can secure your future by making lower bids. However, you may be required to obtain a bid bond before doing so.
If you’re going to be bidding on certain projects, the client will want reassurance. If this is the case, you will likely be required to obtain a bid bond. The bid bond is very beneficial for the client since it locks your bid in place. When you acquire a bid bond and make your bid, you have to stick with your original bid. You will not be able to change your bid or leave without following through. This is very beneficial for the client.
And, it is a good thing for your company. The client knows that you’re willing to stick it out and follow through the bid. Therefore, they’ll be much more likely to work with your company. Using a bid bond is the best way to increase your company’s chances of securing the job.
Get A Surety Bond Right Now
Ultimately, a surety bond will prove to be very beneficial for your company. It might be required or you may feel that it is a necessity. Either way, you have to be cautious before moving forward. Remember that there are many things to consider before acquiring the bond. What bond do you need and what amount is required? Until you’ve answered these questions, you will not be able to acquire the surety that you need. Simultaneously, you have to worry about using the right methods.
The surety bond can be frustrating and confusing for the consumer. Therefore, you should work with a professional. Doing so is the best way to ensure that you’re able to benefit most from the bonds that you obtain. We can help. We’ve been working in the surety bond industry in Canada for many years. If you need to find a good surety bond provider, you should get in touch with us. We’ll educate you on how to get a surety bond and then connect you with a specialized broker or agent that can setup a bonding facility for your company.
If you would like to learn more or speak to a broker or agent regarding your bonding needs, you can contact us or request a quote.
