Performance bonds - which
guarantee the project’s completion according to the building
plans and specifications. If the job is abandoned or the work unacceptable,
the bonding company has the option of hiring another contractor
to complete the work or settling for damages.
Payment bonds - which assure the owner that no liens for labor and
materials will be filed against the property.
Contract bonds - which guarantee both job completion and payment
of all labor and materials.
In general, the bonding company will not have
to pay more than the face amount of the bond.
The new contractor should be aware that bonding requirements may
exclude the new business from bidding on desired jobs. Bonding companies
will not take risks without verifying the technical and resource
capabilities of the bonded contractor. It is essential then for
your business to practice sound business management techniques if
you hope to be able to qualify for bonding in the future.
Bond application packages for pre-qualifying
are available, just give us a call. We want to assist you with all
your bonding needs.
The following must be met before your bond
can be accepted:
The business name and license number (if issued)
on the bond must correspond exactly to the information in the records
of the CSLB;
The license number (if issued) on the bond of
a qualifying individual must match that of the firm for whom the
individual is to serve as the qualifying individual;
Bonds must be filed with the CSLB within 90 days
of the effective date of the bond;
Bonds are non-transferable. Do not attempt to
transfer a bond.
Keep your required bonds in effect at all times for active licenses.
Renew your bonds promptly, to
avoid license suspension. CSLB averages 4 weeks or better to post
a new bond and proof of renewal. Lhasa Insurance and CLOC will remind
you 90 days before bond expiration.