Common Questions about Performance and Retention Bonds

One of the most common questions about retention and performance bonds is how would it cost, specifically for the performance bonds. Well, actually most often than not it will usually cost about .5 up to 10%, however it would always depend on the total amount of the project and how is your credit score if you will be the one who will buy the bonds. Like for example if you have a high credit score and a large project then most probably you will just need to pay up 1 up to 3% but if you have a low credit standing and a low budgeted project then the higher percentage you will need to pay.

Next is that you might be asking who are the people involved in such bonds, such a performance and retention. The parties involved in bonds, specifically construction bonds, there will be three parties involved in it. The first one is the owner itself or the subcontractor, which is the one who bought the performance bond; then the sub-contractor which is the one who is task to finish and maintain the project for a period of time, after it was completed; and then the surety, the ones that provide the bond and will act as a guarantor when it comes to retention bond. So if you need a surety provider then go ahead and get someone from http://drsbonds.co.uk.

Your next question might be who is the one responsible to buy a bond? Well, for this question you need to know what are your goals in getting such bonds so that you will be able to decide as well if you will get it or not. For performance bonds, as the owner of the project you are the ones who are required to secure the performance bond, in order to make sure that the project or your property that is in construction will be finished in time. And with the case of retention bonds, it is to make sure as well that the subcontractor will be maintaining or fixing whatever that will be damaged within the maintenance period, which means that it will be beneficial with the two parties since for the owner, he does not need to pay extra for the repairs and for the subcontractors, they will not be chasing the contractor since there will be a fix date and fix amount that they will be receiving.

Now, another question that might be running in your head even before you will secure a bond or buy one is what if there is a claim against your bond, then you actually need not to worry about because a claim is only a claim, it is not a decision and it cannot close down your business, that is why the surety will be the one who will conduct its own investigation to see if the claim has any truth in it or not. So if you want to make that you’ll get a good surety for such incidents then visit http://drsbonds.co.uk.


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