Surety bonds offer compelling advantages as a type of security against contract default when compared to guarantees offered by banks. The demand for surety bonds as a financial instrument as opposed to merely a statutory requirement has been gaining traction.
Most businesses with a leased facility or office space will have some sort of security deposit requirement. This information can be found disclosed in CPA prepared financial statements or available online for publicly traded clients, or otherwise via a conversation with the company’s CFO or controller.
There are key differences between the two instruments:
Surety bonds offer beneficial alternatives:
Often a letter of credit is a firm requirement, and a beneficiary may insist a letter of credit since it is more favorable to the beneficiary. Many times, a bond will be accepted. For the above reasons, it is always a smart idea to ask if posting a surety bond in lieu of a letter of credit is an available option as it has proven to be an advantageous alternative.
Questions about the benefits? The AssuredPartners Construction & Surety Team is available to navigate the differences and find the solution for you. Reach out today.
April is an important month for the construction industry, as it champions National Safe Digging Month and National Work Zone Awareness Week. These initiatives are not just about safety; they are...
The Longshore and Harbor Workers' Compensation Act (LHWCA) is an important federal law designed to provide benefits to employees engaged in maritime work or occupations, covering those who work...
Surety bonds play a crucial role in the construction industry, providing financial protection and ensuring project completion. Two common types of surety bonds used in construction projects are bid...