Hawaii Surety Bond Types
The Hawaii state government requires many other types of businesses from auctioneers to car dealerships to purchase surety bonds as well. In each of these cases, the government seeks to use a surety bond to protect consumers from fraudulent businesses and broken contracts. Individuals and businesses that aren’t required to be bonded can also benefit from purchasing surety bonds because doing so generally reassures customers that a business is reliable and committed to fulfilling its contracts. And, if something unexpected were to go wrong, the surety would be able to financially back up the individual or business if all other means of insurance failed.
Hawaii Surety Bond Requirements
There are some unique reasons you might need a surety bond in Hawaii. For example, most individuals or companies who do manual work in the ‘aloha state’ need to secure a labor and material payment bond. Surety companies guarantee this type of bond to the owner, or principal, of a construction project on the contractor’s behalf. This bond compensates the obligee in the event that the contractor fails to follow the terms of the contract and cover payment for all equipment, labor, materials and services. These bonds are usually issued for the same amount as the project’s performance bond.
Make sure you look at the specific rules and regulations regarding bonding in Hawaii. You want to make sure you obtain the right type of bond in the correct amount to avoid penalties. But keep in mind, surety bonds aren’t just about following the law and avoiding penalties; they’re about protection. They’re about protecting you and your potential customers.