How to qualify for a bond

When your business has grown large enough you might want to bid on a serious-sized contract. To do this you will likely require bonding. What do you need to do to qualify for a bond?

The insurance company will be looking at your company to see how well you rate in these areas:

  • What stability do you have with employees - do you have a big turnover? Are your employees trained and skilled?
  • Your balance sheet, income and expenses to measure your financial strength.
  • What is your relationship with your bank? Do you have good credit? Are you financially sound?
  • Your track record - what similar projects you have done and where.
  • How long have you been in business and how did you get started. What is the company history?
  • How are you structured and how do you do your reporting?
  • Do you have key person insurance? What happens if you cannot continue to lead project?
  • What are your trade references? How are you regarded by your peers?
  • Are you of good character?
  • What assets do you bring such as specialized equipment and trades?

So if you have hopes of bidding for those large jobs then do consider these questions. What steps can you take to get you into a prime position for applying for a bond?