if you haven’t heard of the turmoil occuring in the financial sector, well – i wouldn’t look at the news today! Banks around the world are filing for bankrupcy protection after years of service (some surviving the great depression)! Adding to the market instability we have falling house prices, manufacturing companies downgrading their staff and gas prices remaining high – it is a wonder business is still continuing! Well…it is and guess what – it is time to seriously consider guarantees!

Whether you are a manufacturer landing a large account or whether you have people bidding on projects to be completed, you want to ensure that the company will do what the promised on time and at the right price.

Enter the world of Bonding.

Typically guarantees of this sort are found primarily in the construction field, but more and more larger contracts are requiring performance bonds to ensure that the producer can make the product to fulfill the contract terms.

As i get more and more calls about this, people tend to ask whether they can get the bonding facility for just the one job – the answer is yes, but it isn’t worth it.

You see, when setting up a facility, the insurance company will be going through all of your financials, the financials of the principals of the business and be getting a letter from the bank approving you. It is a fairly  in-depth process and it is justifiable.

The insurer will be staking their money that you can do that job in the allotted time frame and at the cost your bid on. They need to know everything about you in order to do that.

Typically, once a company has gone through the process, they keep their bonding facility open annually (even if they aren’t using it) because they never know when they will need it again and they don’t want to go through all the paperwork for every job.

Bonding brings you up to the next level – it means that you are a player and have the backing of the big companies to prove it!

Posted: 09|26|08 at 3:19 pm. Filed under: Bonds, Business Risk, Contractor Risks, Insurance Shopping, Insurers and the Economy, business insurance.
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