Austin, TX -- (ReleaseWire) -- 10/26/2022 --Construction surety bonds are a written guarantee that obligates an insurance company to honor a contractor's performance under the terms of a construction contract. These bonds are essential for protecting the owners' interests, which include knowing that funds are available for proper payment to contractors, subcontractors, and suppliers.

Using construction surety bonds in Dallas and Plano, Texas, the surety firm ensures the performance of the contract to the obligee. Principals are often the contractors, while obligees can be either the owner of projects or the parts that go into them. Insurance companies are most likely to own surety firms.

As a financial safeguard, a surety bond serves as a guarantee. Surety firms verify the expertise and financial stability of contractors before a contract can be awarded to them. It is determined by the amount of risk associated with making claim payments that the surety's prequalification charge is based on.

The S|CPA Group (previously Scarborough, Trlica & Wood) is a certified public accounting firm that conducts reviews and audits of financial statements. They will help consumers secure surety bonds for their construction company so they are ready to go.

Bonds of surety can be classified into three types. Under bid bond, contractors must post payment and performance bonds if they win the contract. Getting a performance bond ensures that the contractor has the skills, experience, and means to fulfill their contractual obligations. There will be no financial responsibility placed on the owner for any economic damage caused as a result of a failure of the contractor to complete the work as promised. Contractors typically require a payment bond to pay their employees, subcontractors, and suppliers.

Even though each surety company has its underwriting standards, the basics are the same across the board. It is necessary for a surety to verify that a contractor meets all of the following criteria before issuing a bond. For example, the contractor must meet the financial wherewithal to satisfy present and future commitments, excellent reputation, and capabilities required to fulfill the project contract requirements.

Surety companies will want to see financial statements from a certified public accountant for the last three years to verify a contractor has the cash flow to meet these requirements.

For more information on CPA for real estate developers in San Antonio and Dallas, Texas, visit: https://www.scpagroupllc.com/real-estate-brokers-and-developers/.

Call 512-373-8239 for details.

About The S|CPA Group
The S|CPA Group- A Member of the S|CPA Network is prepared to provide considerable expertise in construction accounting to diverse businesses. Their number one goal is the satisfaction of contractors and construction project managers.