Surety Bonds: Half Credit, Half Insurance Part 2
In part one of this two-part article, the Knoxville construction attorneys at Cotney Attorneys & Consultants introduced the topic of surety bonds. We kicked off our article by detailing the various parties involved in a surety bond and briefly outlining their benefits. Now, we will continue to discuss this topic while focusing on some state-specific bond requirements for the Volunteer State.
Remember, our knowledgeable Knoxville construction attorneys have dealt with every type of construction-related bond under the sun. Comprehending the ins and outs of this complex subject can leave you in a fugue state, so consult a Knoxville construction attorney before you proceed. In addition to assisting you with obtaining a bond, we can draft, review, and negotiate your contracts to ensure that your firm is primed for success and doesn’t fall victim to a predatory owner.
Credit? Insurance? Or Both?
When you utilize a surety bond, it acts as both a credit to the principal and an insurance policy for the obligee. Obligees are often easier to work with when a surety bond is employed to protect their interests, which means building relationships becomes significantly easier. Nobody wants to worry about negligence and contractual disputes during a construction project, and the surety helps prevent either from occurring.
At the same time, the principal is protected from having to pay exorbitant expenses if a claim is made against the surety bond. Since the surety compensates the obligee, the principal has time to develop a strategy for paying off the surety.
Bonds in Tennessee
The first step to obtain a bond in Tennessee is to apply with an entity, typically an insurance company, that is qualified and licensed to provide bonds. There are more than 50,000 types of surety bonds across the United States, so obtaining a bond can be a lot trickier than you might expect. This is where an experienced Knoxville construction attorney can be of assistance. Our experienced attorneys can help you determine the correct type of bond for your project and ensure that you are providing the correct information to obtain your bond quickly and hassle-free. Don’t waste time trying to guess which bond you need to procure that bid you’re pursuing, consult an attorney and watch your portfolio of projects grow before your eyes.
If you would like to speak with a Knoxville construction attorney, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.