You Want Me to Sign What?
I recently saw an ad for a Gillette® Fusion® ProShield™ razor. In looking closely at it, I noticed it said, “Not completely satisfied with our Gillette Fusion ProShield Cartridges? We’ll give you your money back* — whatever the reason.” Obviously, the asterisk gave details about some additional terms to the offer, but the overall tone was that the company wants customers satisfied.
As odd as this may sound, reading that guarantee immediately reminded me of surety bonds. Let me explain.
Anyone who has been bonded will tell you that they had to sign that multi-page legal document known as the General Indemnity Agreement (GIA) in order to obtain bonds.
Surety is a pure credit instrument, much like a bank loan. It demands some form of collateral. But unlike the bank, the surety bond isn’t taking direct forms of collateral by way of deeds, titles, or Uniform Commercial Code (UCC) filings. What the surety bond is trying to obtain in these forms is a promise — a promise to be reimbursed for losses and loss cost.
GIAs do usually contain harsh language, like collateral calls, in times of impending losses. This language is onerous, and if you didn’t need a bond, you would never sign this document. But this language is the surety’s way to try and gather some assurance of some recovery if a loss would occur (i.e. your promise).
There’s no doubt of the legitimacy of the document and the levels of legal recourse the surety bonds can take in the event of a default or loss; however, it’s usually not the goal of a surety company to bankrupt a company or individuals. The surety’s goal in times of an impending loss is to try to minimize that loss the best way possible, and a lot of the times this consists of the surety working through the problem with the client.
What Do I Do If I Have Trouble on a Surety Bond Job?
So what should you do if you’re experiencing trouble on a bonded job? Simple! Be honest and upfront. If you’re experiencing issues, alert your surety bond agent at the soonest possible point to talk through the issues. At that point, deciding how to inform the surety company will be up for discussion.
Construction is a risky business, surety companies understand this, and they appreciate clients who are honest and work with them as much as they want to work with the client. Your cooperation and your promise are greatly valued.
The promise of indemnity in a surety bond can be a scary concept, but the deeper meaning of this indemnity form is by signing it, both corporately and personally, you’re telling the surety bond that you believe in your company and your product and back them fully. Kind of like putting your “stamp of approval” on the box or offering a “money-back guarantee.”
See what I mean about it being similar (in a roundabout way) to Gillette? By putting your “guarantee” on it, the surety bond will mirror this belief by extending to you bond credit that helps to make you successful. After all, success is everyone’s goal!
So, what questions do you have for our team? Like I said, the concept is scary…and, often times, confusing. What can we do to help you? Let us know! We’re here to talk through whatever issues or questions you may have!
Published on: 05.12.16