If you’ve worked in the construction industry in Maine, you’re probably already familiar with surety bonds. Insurance is always a must for any project, but surety bonds are specifically designed to protect the other entities you work with rather than yourself. Paying for something that mainly benefits others isn’t typically something businesses do, but there’s no choice when it comes to surety bonds.
The need for surety bonds is mandated by the federal Miller Act. While the federal act describes broad guidelines for surety bonds, almost every state, including Maine, has its very own Little Miller Act that goes into more detail. Learn more about the Maine Little Miller Act, and discover the surety bond requirements you need to abide by and how you can benefit from them.
Little Miller Acts
All Little Miller Acts are expansions of the 1935 Miller Act. Because of this act, you must provide performance and payment bonds for your contracts in the construction industry. Not only are you legally obligated to purchase these bonds in most cases, but you won’t get very far in the industry itself without them.
Performance bonds act as a reputable promise that you can complete the contract. If you end up defaulting on the contract with a performance bond in place, the other parties involved are financially covered despite your failure. Payment bonds work the same way, except they ensure that subcontractors and suppliers still get paid.
How Surety Bonds Work for You
Surety bonds protect virtually everyone else involved with the project besides you as the contractor, but that doesn’t mean they don’t benefit you. In fact, there are quite a few benefits that go along with surety bonds you can’t afford to go without.
First, surety bonds cement you as a reputable company. They show that you’re confident in your work, and people will want to see that. Most entities offering contracts won’t even consider companies that aren’t bonded. In addition, payment bonds are required if you ever need help from subcontractors. They’re not going to risk working for a project unless they know they’re getting paid.
Maine Little Miller Act
The Maine Little Miller Act goes into specific detail about the kinds of performance and payment bonds you need for all kinds of contracts. In Maine, you need surety bonds that cover the entire value of the contract. Performance bonds are there to benefit the contract offerer, such as the State or any other contracting body, while payment bonds are there to benefit suppliers and subcontractors.
Keep in mind that these surety bonds protect everyone involved—even the material suppliers for any subcontractors. Materials in context of the Maine Little Miller Act specifically includes rented equipment as well. There are some exceptions, however, as contracts under $125,000 don’t require surety bonds at all.
Get Your Surety Bonds Today from NSSI
Finding surety bonds to fulfill the requirements of the Maine Little Miller Act is easy with NSSI. Our surety bond professionals have the experience and know-how to make sure you remain compliant with regulations and retain good standing in the industry. Contact us today to learn more about all our surety bond options.