If you’re in the construction business and want to operate in Kentucky, you need to be familiar with the Kentucky Little Miller Act. In short, this act dictates regulations about use of surety bonds with your projects. If you want to land any big contracts, you need to know how surety bonds factor in.
Without surety bonds, your project has virtually no chance of even getting started, much less succeeding. The modern industry simply doesn’t allow for it. Learn more about the Kentucky Little Miller Act, and discover how the surety bond regulations can affect your next project and your business as a whole.
Miller Act
Every state’s Little Miller Act is based on the larger Miller Act passed on the federal level. This act has been around since before the inception of most of today’s construction companies, so compliance has been standard procedure for quite some time. At its core, it dictates that construction companies have to get performance and payment surety bonds for their contracts.
Performance bonds are surety bonds that financially protect parties involved in a project should the contractor fail to perform as expected. Payment bonds make sure that everyone involved in a project, from material suppliers to subcontractors, gets paid on time for their contribution even if the contractor’s company goes under before completing the project.
Surety Bonds and Your Company
Surety bonds protect other people in the instance that your company can’t accomplish what was promised. Despite the fact that they only help others, you’re the one who has to pay for them. Many see this as a burden, but your company needs them in order to prosper.
Think of surety bonds as more of a promise than anything else. They’re an undeniable way to show anybody that you might work with that you’re committed to completing the project on time and with the level of quality promised. Payment bonds are also a must if you have to hire any subcontractors to complete the project, as most won’t work without them.
Kentucky Little Miller Act
In the state of Kentucky, the Little Miller Act outlines the specific details regarding performance and payment surety bonds. For payment bonds, they have to cover the entire price of the contract, no less than 100 percent. This Little Miller Act also dictates that all people involved in the project be covered, including material suppliers for subcontractors.
Not every contract necessarily requires this level of coverage, however, as it is typically reserved for more valuable projects. If your contract’s worth is under $25,000 for example, you don’t have to worry about this.
Surety Bonds From NSSI
Finding surety bonds from a source you can count on can be tough, but NSSI is here to help. We’ve been working with our friends in the construction industry for years and are happy to take care of all your surety bond needs to remain compliant with the Kentucky Little Miller Act. Contact us to get started with the bonding process today.