How to Get Rid of Bail Bonds and Why You Should

“How am I going to miss you if you don’t go?”

Performance Bonds are issued by insurance companies, but are not insurance policies. When you reach the end of your car insurance, it will expire if it is not renewed. In addition, the company can cancel it in the middle of the year. Boom, it’s done! Insurance policies are not “forever”.

With bail bonds it is different. First of all, they are more difficult to obtain. So when you finally got it, they don’t expire! And the bond company cannot cancel a performance bond. So how to do they finish?

The fact is that people focus on getting surety bonds because they are a required element of many transactions, but give little thought to getting rid of the surety bond, eventually. Let’s go over why you want to close a surety bond and how to do it.

Every performance bond is married to a written contract that is identified in the first part of the bond. They are married to death, until the contract is completed. If you have a two-year contract covered by a Performance and Payment Guarantee, you have a two-year guarantee, unless the contract is extended. If the contract is modified to a term of 25 months, the deposit follows automatically. If the dollar amount of the contract is increased, the bond automatically follows. The purpose of the bond is to guarantee the satisfaction of the Obligor (the beneficiary of the bond) with the fulfillment of the contract. Therefore, the bond remains in force until the obligee/contract holder accepts the entire contract.

To settle the bond obligation, a release or acceptance of the contract by the obligee is required. The applicant/principal (contractor) cannot cancel or close the bond. Only the obligee can finish it.

closure evidence it may consist of a status inquiry form completed by the obligee. The questions would be:

If the project IT IS finished:

Completion Date: ___________ Acceptance Date: _____________ Final Contract Amount: $___________

If the project IT IS NOT finished:

Approximate Percent or Dollar Amount Completed: $_____________________________

Describe any disputes or performance issues on the project: _______________________________

Do you know of any unpaid invoices for labor or materials? ____ No ____ Yes If yes, please describe: _____________________

Current Estimated Completion Date: ____________________________________

now that we know What to close a performance bond, why bother to do it? There are very good reasons…

bail

  • The bail bond (bail bond company) will end the liability on their books when the bond is released.
  • They also immediately earn all remaining bonus. Those are two good reasons!

The Contractor / Principal

  • That part of the company’s bond-issuing capacity will be restored to support a new contract. This helps them qualify for more and bigger projects. That is the source of income for your business.
  • When complete, the project is added to the company credentials. They can now list the contract as a successfully completed job. This is how you build your resume.
  • The applicant company, its owners and spouses have a legal liability arising through the indemnity agreement (a liability waiver issued to protect the guarantee). It is literally a liability that must be disclosed in your financial statements. When the bonds are released, this business and personal liability ends.

bonding agent

  • The agent also wins because more bonds can be issued. And that’s how they make a living.

conclusion

All You earn when the job closes and the bond is released. This is a necessary process that should not be ignored.

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