As a Canadian, who deals with surety bonds, you have likely formulated the opinion that a surety bond does not benefit the principal in any form whatsoever. Although it might not provide the principal with a substantial amount of protection, it can offer other benefits. With this in mind, you should understand that the surety bond is not a scheme. It benefits both sides of the arrangement and you’ll find out how below.
Remember that it is usually required that you obtain a bond, before you can obtain a license. Although this can make the professional’s life a little more stressful, it can also help them gain credence and respectability. Why is this the case? Well, businesses, which can officially state that they’re licensed and bonded, will look much more professional and trustworthy in the eyes of the consumer. This could equate to added credence and increased sales.
Aside from making you look much more professional in the eyes of the client, bonds can also help you acquire more trust from your industry counterparts. This is downright crucial for construction contractors in Canada. This is the case, because these individuals will consistently need to work alongside others. For instance, they’ll need to acquire materials from supplies. They’ll also need laborers. If you do not have the bonds needed, none of these individuals will be willing to give you the time of the day.
Your Foot In The Door
Another way that surety bonds can help the principal is the fact that they’re capable of helping you get your foot in the door. This is true in many circumstances, especially in regards to the bid bond. Without the bid bond, the principal would never be able to acquire the rights to any projects. And this is also true, when looking at the license bond. Without the bond, you won’t be able to get your license and will not be able to offer your services or products to the public. Therefore, a license bond such as one from Alberta, gives you the ability to put your foot in the food and begin offering your services and generating revenue.