For just about every kind of contract work in the United States, you need surety bonds. These bonds help protect everyone involved and are often legally required, but the bonding process can be a bit hard to understand if you’ve never dealt with it before. One of the most important aspects you need to know is your local Little Miller Act.
The federal Miller Act describes general surety bond laws that are valid throughout the country, but each state has its own version called the Little Miller Act. If you’re trying to conduct business in Indiana, you’re going to need to know what’s involved. Learn about the Indiana Little Miller Act, and discover how it affects how you get your surety bonds.
Miller Act History
The first Miller Act was put into place all the way back in 1894, when it was called the Heard Act. Bureaucratic limitations of the time made it effectively useless, however, so another act was pushed through in 1935. That became the Miller Act we know today, and it plays a very important role when it comes to surety bonds.
At its core, the Miller Act governs the need for performance bonds and payment bonds for contract projects. Performance bonds are important in that they ensure all parties involved that the work will be completed on time and with the promised quality. Payment bonds ensure that everyone gets paid for the work, including subcontractors and any material suppliers.
Benefits of the Miller Act
The purpose of surety bonds is to protect the clients of contractors, so contractors often view them as more of a burden than anything else. The Miller Act makes them legally required, creating no escape from that burden, but surety bonds offer more benefits to contractors themselves than you might think.
A lot of jobs will require the use of subcontractors. Without surety bonds in place to guarantee their payment, subcontractors are going to be very reluctant to come on board. In addition, surety bonds mean subcontractors won’t have to worry about the contractor’s company folding and putting the financial weight of the project on their shoulders.
Indiana Little Miller Act
The Indiana Little Miller Act describes specific guidelines for bonds and what they cover in construction and other contracted projects. The bond amount must equal the total contract price if the project itself is required to be bonded. Surety bonds cover virtually every facet of the project, with a few exceptions. They do not cover suppliers to subcontractors or anyone who is not officially contracted with a contractor or subcontractor.
Further details deviate based on the specific statute the project corresponds to. Indiana has four distinct statutes in total to address this. The first is for projects owned by the State of Indiana. Prisons would fall into this category. The second is for projects partially supported by the state, like some universities. The third is for infrastructure like highways and bridges, and the last is for local government projects like parks and schools.
Surety Bonds from NSSI
The Indiana Little Miller Act provides guidelines for all your surety bond needs. Not only are they legally required in many cases, but you need surety bonds to protect your reputation as a contractor. Most people aren’t going to work with you otherwise. To get the surety bonds you need, look no further than the experts at NSSI. Contact us today to learn more about everything we can offer you.