Ontario Construction Bonds
What do I need to know before applying for bonds?
Bonds, before they are issued, require assessment from a financial institution or a crediting firm. The project’s risk is calculated, which includes the contractor’s track record in completing projects in a timely manner and documents supporting financial stability for all the parties involved. From there, the underwriter decides if a bond is to be issued or not.
The government mandates projects to have bonding for construction if the agreed payment reaches a particular amount, so be prepared with as much supporting documents as possible.
What is the significance of bid bonds?
Bonding for construction, in the form of a bid bond, is required for most projects. It formalizes the agreement among the project owner, the bonding company and the contractor.
For the owner, the bond signifies that the project’s pre-requirements have been approved by the bonding company. Funding the entire operation shouldn’t come as a problem, once the project passes the bonding company’s assessment.
For the contractor, he is expected to perform the designated tasks at the price stated on the contract. Replacing his services comes easy if the owner avails of a performance bond.
Bid bonds must be submitted upon bidding; otherwise, the bid may not be approved. Promptness is absolutely necessary to avoid complications and delays in the project.
Bonding Services Offered by St. Andrews Insurance Brokers
- Agreements to Bond
- Bid Bonds
- Performance Bonds
- Labour & Material Payment Bonds
- Maintenance Bonds
- Prequalification Letters
Classes of Contractors we Support
- General Contractors
- Road Contractors (paving, grading)
- Sewer and Watermain Contractors
- Site Services
- Subcontractors (ie. mechanical, electrical, drywall etc.)
Here Is What You Need In Order to Make an Application for a Bonding Facility;
- An organizational chart that shows your key employees and their responsibilities;
- Detailed resumes of yourself and your key people
- A completed Contractors Questionnaire form, which our Surety Specialist can walk you through if needed, but we designed the form to be easily understandable and completion should take about 20-30 minutes.
- Evidence of a line of credit at your bank and a copy of your most recent Terms and Conditions letter if it is available.
- Letters of recommendation from owners, architects and engineers.
- Financial Statements -Financial statements are vital to any business that grants credit, and sureties are no exception. Depending on how long your firm has been in business, the surety will want to see fiscal year-end statements for the last two to three years.
Contact St. Andrews Insurance Brokers today for all of your bond needs. Simply fill out the short form at the top of this page, or call us at 1 866-621-6980 to start your free Bond quote.