Posted on: 11 November 2020
Is your company looking to take on a big project that's larger than the kind of project you normally tackle? If so, you might want certain assurances that your company won't be financially liable if something goes wrong during an especially big project. This is one of the reasons why surety bonds exist. Some construction firms use surety companies to back them up when taking on a big project. Here's some more information about surety bonds and why you definitely want a lawyer before you get into such an arrangement.
A Surety Bond Backs You Up
Your client has certain expectations of what the final project will look like when it is done building. There may also be a timeline involved that the client wants to stick to. As a construction company, you feel good about meeting these obligations, but you also know that delays can happen and other problems can arise. If you are concerned you will be held liable if you can't provide what the client wants, a surety bond can back you up. You pay for the surety bond before the project starts, as a kind of insurance against things going wrong. If something does go wrong, the client can file a claim and the surety bond company will investigate. If it's clear that something did go wrong and it's not the client's fault, the surety bond company will pay the client so you don't have to.
An Attorney Can Help
A surety bond is a three-way agreement between the construction firm, the client, and the surety company. A contract like this can be complex, and you need to make sure you understand everything in it. A construction surety lawyer has been down this road before and knows the difference between a good and bad agreement. Your attorney can make sure everything is on the up and up and that you won't be held liable by surprise. A construction surety lawyer will also look at what exactly you expect and can make suggestions about setting expectations before you sign on the dotted line and start the project.
What Happens If the Surety Bond Doesn't Pay Out?
What happens if the client files a claim against you but the surety bond company feels they don't need to pay out? This could leave you in a legal dispute with both the client and the surety firm. Having your own lawyer will prepare you for this situation and will hopefully help you navigate it without putting your business into financial straits.Share