Every state government has different laws about what kinds of businesses need to be bonded, and Texas is no exception. If you own or run a construction business then you will likely need to be bonded if you expect to be awarded any jobs. Texas requires businesses to secure a Surety Bond in order to protect its consumers from being taken advantage of. As a contractor, when you enter into a contract, a surety is a way to guarantee that your services will be fully completed and all stipulations are followed.
As the principal, you promise to fulfill a duty to the obligee, which is often a department of Texas’s state government. After you secure the bond, the obligee is then assured the duty will be performed. Any failure on your part to meet the contract’s stipulations will allow the obligee to collect retribution up to the bond’s full amount.
There are bonds for every aspect of the job
There are several different types of bonds, depending on the type of work being performed. Bid bonds are essential before any work is begun. For example, if you are contractor bidding a federal project, you will be required to submit bid bonds. Even without the requirement there are many advantages that surety bonds provide you and your customers.
Other industries in Texas require bonding as a part of their legal licensing procedure, but businesses and individuals who aren’t required to secure them can also purchase surety bonds. Business owners may decide to purchase bonds as security against, among other things, employee theft.
Customers will feel more confident knowing that you have a surety bond in place, before they enter into a contract with you. They see this as a sign that you perform your work in an ethical manner and concern yourself with customer satisfaction.