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  • Bonding & Insurance?

    Looking for a little education on Bonding & Liability Insurance.

    The difference between the two?

    When both would be required?

    When one or the other?

    Thanks for any input.


    J.C.

  • #2
    Re: Bonding & Insurance?

    http://www.bargaineering.com/article...d-insured.html

    way I understand it....
    Poor Planning On Your Part Does Not Constitute An Emergency On My Part!!
    You can fire me...but you can't tell me what to do!

    Derek

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    • #3
      Re: Bonding & Insurance?

      It's a performance Bond.You no finish, the client puts a claim into your bond company Bond company pays,then sues you
      Better make sure you have a good bond co.

      Liability ins. you already know

      Comment


      • #4
        Re: Bonding & Insurance?

        Originally posted by JCsPlumbing View Post
        Looking for a little education on Bonding & Liability Insurance.

        The difference between the two?

        When both would be required?

        When one or the other?

        Thanks for any input.


        J.C.

        JC: Generally speaking, liability insurance covers you for things that might go wrong from your business operations. (You leave a sewage ejector pit cover off, someone falls in and breaks their hip. Your liability insurance covers that. You put in a water supply and a week later it leaks and takes out a ceiling. Your liability insurance covers that (under completed operations.)

        Bonding is an insurer guaranteeing to come up with the money to complete something you are contractually responsible to complete. Lots of kinds of bonds.

        Here in Mn to plumb, I have to get a plumbing bond. If I put in a sewer and leave the yard or road a mess, the State calls my bonding company and they have to spend up to $25k to make it right. I also need a Mechanical Bond. (Same deal as plumbing essentially).

        Some jobs require you to provide a performance bond to get the job as part of the specs. If you underbid or go out of business for some reason the bonding company (insurance) company will step in and pay to get the job finished. Then they will come after you for restitution if at all possible.
        Time flies like an arrow.

        Fruit flies like a banana.

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        • #5
          Re: Bonding & Insurance?

          See also:

          -Bid Bonding
          -Performance Bonding
          or the term "Surety Bonding"

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          • #6
            Re: Bonding & Insurance?

            You are correct on the performance part of a performance bond. Around here they are called performance and payment bonds.

            The payment refers to any subs or vendors you pay through the course of the work.

            The owner wants to be covered from liens filed by subs or wholesalers.


            Bid bonds are too much of a pain in the butt. I submit a cashier's check for 5% of my total with my bid.....

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            • #7
              Re: Bonding & Insurance?

              Hi,
              Here i am posting a PDF stuff which will guide you and clear it to you the difference between bond and liability insurance.
              ccbed.ccb.state.or.us/WebPDF/CCB/Publications/LiabilityFAQs.pdf
              I hope this would be much helpful for you.
              Also telling about when it is needed to get bond and liability insurance.
              Thanks
              supplemental insurance minneapolis

              Comment


              • #8
                Re: Bonding & Insurance?

                They required me to carry both surety bond and liability for the first year here. I don't get the surety bond, unless you're some flunky who gets his first payment on a couple of contracts then skips town, the surety bond will cover it.

                Neither is very expensive. The surety is about 5-10% of the total bond amount. State Farm gave me the best rates on a $2mil liability ins. policy.
                Ray

                “Wealth is the product of man's capacity to think.”— Francisco d'Anconia
                Atlas Shrugged (Part 2, Chapter 2, Page 411)

                www.mauiplumbinginc.com

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                • #9
                  Re: Bonding & Insurance?

                  Originally posted by mpm View Post
                  They required me to carry both surety bond and liability for the first year here. I don't get the surety bond, unless you're some flunky who gets his first payment on a couple of contracts then skips town, the surety bond will cover it.

                  Neither is very expensive. The surety is about 5-10% of the total bond amount. State Farm gave me the best rates on a $2mil liability ins. policy.
                  Ray, I'm curious, does your liability policy pay the $2m on one event, or do they limit the payout on a single event, and the $2m is a total coverage on multiple events? (I also have a $2m policy but it's only $1m per event.)

                  BTW: That is one sharp logo you have. I really like it! It fits the flavor of the area.
                  Time flies like an arrow.

                  Fruit flies like a banana.

                  Comment

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