Trade Contractors

Each trade has its unique opportunities and challenges. You supply much of the labor and expertise that builds this country. Navigating cashflow, delays, skilled labor and ever-changing contract terms are part of your normal operations.

It may surprise you that many bond companies either will not work with trade contractors at all or they may not be the right fit. Trade contractors often do not control the flow of funds from a job. They usually need to use bank borrowing to finance their cash cycle and are often forced to accept difficult contract terms. Not every bond company and broker understands this. MG Surety Bonds is different. We have programs for trade contractors with bond companies that understand your unique specialties. Our terms and conditions for trade contractors cannot be beat.

Whether you have $100 million in backlog need your first bond, we are here for you. We are licensed in all 50 states and will work to get you a quick approval. If you are doing any of the following work, we have a bond program for you:

  • Carpentry
  • Masonry
  • Flatwork
  • Electrical
  • Mechanical
  • Drywall
  • Erection
  • Precast or tilt up
  • Roofing
  • Acoustical
  • Low Voltage
  • Waterproofing
  • Insulation

At MG Surety Bonds, we want to be your bond partner for life. This also means we want to help protect you and give you guidance. Below are some best practices for all trade contractors:

Know Your Payment Protections

  • On public work, The Prime Contractor should have to post payment bonds protecting your right to get paid. Unfortunately, mistakes are made, and this is not always the case. On any project involving public funds, you should request a copy of the bond before starting the project. Not only is this your right, but if you do it before you start, The Prime Contractor shouldn’t be concerned.
  • On Private Projects, there may be a payment bond in place and there may not be. Be sure you know your local lien rights along with the notice and filing requirements. We are also seeing a rise in Subcontractor Default Insurance (SDI) on private work. Remember, this protects the Prime Contractor from the default of their subs but these products typically do not protect the subcontractors.

Review the Contract Carefully

Regardless of trade and whether the contract is bonded or not, subcontractors should spend considerable time reviewing their contract for difficult language. Below are provisions that MG Surety Bonds regularly sees in contracts that subcontractors should review carefully:

  • What Bond Form is Required? – Is it an industry standard form such as AIA or Consensus Docs, or is it the General Contractor’s own bond form? What notice provisions are required? Does it contain language for guaranteeing items outside the contract?
  • Payment Terms – When do you get paid? How do you get paid? Are you taking on a fair share of the payment risk? Are the terms “Pay-if-Paid” or “Pay-when-Paid”?
  • Broad Indemnification – Many contracts now require the subcontractor to indemnify for everyone and everything. Most states have provisions requiring the subcontractor to be at least partially at fault but not all. Trade contractors need to understand who they are covering for. 

How Do You Compare to Others?

Have you ever wondered how you stack up to the competition? How much is their overhead? What are their margins? What is their labor cost? How much working capital do they have? MG Surety Bonds has access to real time benchmarking data. It allows us to give any trade contractor a benchmarking report for the industry based on your size and NAICs code. We can also take your financial information and stack it against the competition. These reports are available free to our trade contractor customers.