In many parts of the country, operating a tree service is a great way to make a living while helping people maintain their yards. Before you can spend your days in the great outdoors, chainsaw in hand, you have to think about becoming bonded. A surety bond, according to the Surety & Fidelity Association of America, is a kind of insurance you can purchase that guarantees your customer financial compensation if you fail to live up to your agreement.
Contact a surety bond agency in your area. Be aware that some surety bonds can be provided by the United States Small Business Association. These kinds of bonds provide opportunities for smaller or minority-run contractors to build themselves from the ground up.
Complete the necessary bond forms. Your bond provider will need to know a lot of information in order to be able to set a rate and assess the risk you propose to them. Bryant Surety Bonds, for example, asks business owners to submit a financial information statement for anyone who owns more than 5 percent of the tree company in question.
Submit credit information to your bond provider. The company needs to know what is on your credit report, as these numbers provide a clue to your financial stability. A company with shaky finances, for example, may be at much greater risk to leave projects unfinished.
Decide which kinds of bonds you wish to purchase. The Surety Information Office points out that a few different ones are available. A bid bond guarantees the particulars of the original contract between your tree service and the property owner. A performance bond entitles the property owner to money if you fail to trim the trees in question. A payment bond ensures that you will pay any subcontractors who may be involved in the project.
Pay the premium requested upon approval. As JW Surety Bonds notes, the process of bonding is fairly straightforward, and this part is pretty clear.
Sign the bond and return it to the surety company. This bond is a legal contract that entails serious obligations to your tree service. (You also receive the benefits, of course.) Retain a copy for your files and be ready to provide it to customers upon request. After all, the prospect of having trees or tree limbs removed can be nerve-wracking for homeowners. It’s reassuring to be able to prove to the homeowner that your company is bonded, and they will receive the service they have requested.
- Crooked Tree, Straight Tree at Sunset image by loongirl from Fotolia.com