© 2011 Farmin Rothrock & Parrott
Companies We Feature...
© 2011 Farmin, Rothrock & Parrott, Inc
Bonds
Bonds of all types are available from Farmin Rothrock & Parrott:
Performance Bonds, Bid Bonds, Notary Bonds and License
Bonds to name just a few.
Many people are surprised to find that Bonds are often more
difficult to obtain than insurance, especially in the construction
business. That’s because people sometimes confuse bonds with
insurance and they are completely different products.
With insurance, a premium is based on the statistical possibility
of a loss in a particular type of business. If the insurance
company has to pay for a loss the customer does not have to
reimburse the insurance company. In bonding, however, there is
no loss anticipated. Essentially, the bonding company puts up
the money on your behalf as a show of solvency and good faith.
If you should fail to perform as a contract specifies, then the
bonding company forfeits the money. At that time, however, they
come back to the customer for reimbursement. In other words,
they are simply loaning you the money so you don’t have to put
up your own money for the duration of the contract. And, for that
service, you pay a fee, often around 2-5% in the case of a
performance bond.
This is why financial underwriting is so thorough in the case of
bonds. The application process will often require a CPA prepared
financial statement and a detailed history of the company’s prior
projects. We normally advise clients to start early when first
setting up a bond account so that you won’t miss that first bid
deadline.
Other types of bonds, such as licensing or notary bonds, are
quite simple and usually inexpensive to obtain. Often a simple
one or two page application is all that is required and with some
of those bonds we can issue them the same day. Farmin
Rothrock & Parrott specializes in commercial insurance and
bonds so be sure to contact us to review your coverage.
Request a Quote for
Bonds
For Even Faster
Service, Call Us
Right Now!
(509) 323-3232
8:00AM - 4:30PM
Monday - Friday
Companies We Feature...
Bonds
Bonds of all types are available from Farmin Rothrock & Parrott:
Performance Bonds, Bid Bonds, Notary Bonds and License
Bonds to name just a few.
Many people are surprised to find that Bonds are often more
difficult to obtain than insurance, especially in the construction
business. That’s because people sometimes confuse bonds with
insurance and they are completely different products.
With insurance, a premium is based on the statistical possibility
of a loss in a particular type of business. If the insurance
company has to pay for a loss the customer does not have to
reimburse the insurance company. In bonding, however, there is
no loss anticipated. Essentially, the bonding company puts up
the money on your behalf as a show of solvency and good faith.
If you should fail to perform as a contract specifies, then the
bonding company forfeits the money. At that time, however, they
come back to the customer for reimbursement. In other words,
they are simply loaning you the money so you don’t have to put
up your own money for the duration of the contract. And, for that
service, you pay a fee, often around 2-5% in the case of a
performance bond.
This is why financial underwriting is so thorough in the case of
bonds. The application process will often require a CPA prepared
financial statement and a detailed history of the company’s prior
projects. We normally advise clients to start early when first
setting up a bond account so that you won’t miss that first bid
deadline.
Other types of bonds, such as licensing or notary bonds, are
quite simple and usually inexpensive to obtain. Often a simple
one or two page application is all that is required and with some
of those bonds we can issue them the same day. Farmin
Rothrock & Parrott specializes in commercial insurance and
bonds so be sure to contact us to review your coverage.
Request a Quote for
Bonds
For Even Faster
Service, Call Us
Right Now!
(509) 323-3232
8:00AM - 4:30PM
Monday - Friday