Surety bonds are absolutely vital to the construction industry. They provide confidence to your employees and clients that you, as a business, are able to live up to your obligations, complete the work you agree to complete, and live up to all of your contractual obligations. They’re peace of mind and they back you up in case something happens that results in you not being able to finish a job.
But a surety bond isn’t forever, and for someone new to the game, you’re perfectly justified in wondering how long surety bonds last. Here’s an overview of the duration of surety bonds, whether you can renew them, how often it needs to be done, and where you can find help with the process.
Duration of Surety Bonds
Almost every surety bond has an expiration date. However, not all surety bonds are created equal and the duration of surety bonds can vary wildly from one to the next. You may have a performance bond that lasts a year, a payment bond that lasts two years, or a range of other expiration dates.
Renewable vs. Non-Renewable Bonds
Many bonds are renewable, but not all. It depends on things like the type of bond you’re dealing with, whether the person who requires the bond needs it to be renewed. For example, if the bond covers a specific job, and you’ve completed that job, there’s no need to renew the bond. You will, however, need to get bonded for your next job.
In some cases, the obligee will have to release you from the bond at the end of the job, or you’ll have to continue paying annual premiums.
Renewing Bonds
Renewing a surety bond, for the most part, is a pretty easy and straightforward process. You’ll need to go through a new risk analysis from the surety company, who will calculate the premium for the new bond. They will review whether the bond will likely be claimed based on factors such as your experience, your financial records, the kind of bond being pursued, your credit history and more.
After the premium is set, you’ll need to pay it to extend the bond term. You then have the assurance that your bond remains in force and the company will issue a Continuation Certificate to your obliges who are protected by the bond. You should receive a renewal notice when it’s time to do this, and you’ll need to take care of it before the original expires. Otherwise, you may need to complete the entire initial process all over again.
Where to Find Help
If you’re facing an expiring surety bond and you need help approaching your renewal before the duration of surety bonds deadline passes, National Surety Services, Inc. can help. We have over two decades of experience as a leading surety bond company across all fifty states, and we’re ready to make the process as easy and stress-free for you as possible. From special SBA bonds to custom bonds for your business, we’ve seen it all. Get in touch with us today to find out how we can help you.