Surety Bonding for Contractors

One way for a construction contracting company to ensure access to critical relationships needed for sound business advice and for qualifying for surety credit is to partner with a professional surety bond producer, according to experts at the National Association of Surety Bond Producers (NASBP).

Most contractors know that surety bonds help establish their credentials, demonstrating their ability to perform through performance and payment bonds. However, they may not realize the full value of building a relationship with an experienced bond producer like BFBond.com / Bernard Fleischer & Sons Inc.

We help guide companies through the process of achieving surety credit and act in many capacities – mentors, educators, advisors – with construction firms to ensure that they mature and remain successful. Check out our Surety Bond Primer below:

A surety bond is a legally binding contract that makes sure three parties carry out their obligations: the surety company, obligee, and principal. The surety company is the one that provides assurance to the owner (obligee) that the contractor (principal) will carry out a contract. Being in the contracting business comes with many tasks one of which is being bonded. Bonding requires a contractor to know requirements of a project, type of bond and the amount involved. As a contractor, you should know that having a surety bond is not the same as securing insurance. A surety bond is meant to cushion the obligee against a shoddy or unfinished job. Below are tips that will assist you to get bonded as a contractor and make the process of getting bonded efficiently:

Understand how surety bonds work

Know the difference between insurance and surety bonds. Insurance protects your business but bonds don’t. A surety bond is an additional security feature for a client. There are three main types of bonds:

Bid bond

This a bond that guarantees a bid has been proposed with good intentions and the contractor will carry out stated obligations at the bidding price.

Performance bond

This is a surety bond that cushions the owner against financial loss in case the contractor fails to carry out the contract as specified in the terms and conditions.

Payment bond

This is a bond that guarantees that the contractor will meet expenses for paying a given cadre of workers, subcontractors, and suppliers of equipment.

Be acquainted with bond pricing

The prices of surety bonds are based on a percentage of the total value of the bond that is required. The bond premiums vary according to the type of bond, size, and duration. The variation is from 0.5% to 10%.

Partner with a credible surety agency

When you work with a credible agency like BFBond.com / Bernard Fleischer & Sons Inc. (Check out our Google Reviews!) you will get a bond that is affordable and fits into your job requirements. We take the time to research surety options available to you and help you decide what’s best for your unique situation.

Learn more at BFBond.com or call us at 800.921.1008

5 Star Service for License & Permit Surety Bonds with BFBond.com

Are you starting a business or do you own an established business that requires a license from your local Department of Consumer Affairs or State Government? Does that license require you to get a Surety Bond?

We get lots of first time clients that are unaware of what surety bonds are, and how to properly obtain one, and many established businesses that come to us unhappy with their current bond providers. We love educating our customers and giving them the right tools to create or maintain a successful business when it comes to Surety Bonding.

Surety Bonds are sometimes required by a municipality or other public body as a condition to granting a license or permit to engage in a specified activity, this bond guarantees that the party seeking the license or permit (the obligor) will comply with applicable laws or regulations. These bonds can also be structured to provide indemnity guarantees to third parties who sustain injury or damage as a result of the obligor’s activities as described in the license or permit when such a guarantee is required. For example, businesses that hang signs over public sidewalks may be required to provide indemnity guarantees for injuries to pedestrians.

We at BFBond.com / Bernard Fleischer & Sons Inc. take pride in our stellar customer service. (Don’t take our word for it, check our ratings on Google HERE) We will walk you through the process step by step and get you bonded fast, with great rates. If the bond you require needs to be renewed, our renewal process is effortless when the time comes.

The NYC Department of Consumer Affairs  recommends BFBond.com / Bernard Fleischer & Sons Inc. (Formerly Advanced Insurance Services) as a Surety Bonding agency for your consideration, but we also provide surety bonds nationwide! Join our client family and see what the great reviews are all about.

Call 800-921-1008, apply online at BFBond.com and live chat with us or visit our office at 29 Broadway, Suite 1511 New York, NY 10006 directly across the street from the Department of Consumer Affairs’ offices.

 

 

Mechanic’s Lien Bond aka Bond Around a Lien

Mechanic’s Lien Bond aka Bond around a lien, lien release bond, and bonding off a lien.

What is a Mechanic’s Lien?

Mechanic’s liens in their modern form were first conceived by Thomas Jefferson, to encourage construction in the new capital city of Washington. They were established by the Maryland General Assembly, of which the city of Washington was then a part.

However, it is not likely that Jefferson single-handedly dreamed up the idea. A lien is a mechanism used by contractors and suppliers to force payment of outstanding monies due from the owner, tenant or landowner. A Mechanic’s Lien will assure that the owner completes all required payments to the contractors participating in the project. It is also sometimes called a material man’s lien or supplier’s lien which can be confusing for some people, but they all are in fact the same thing.

What is a Mechanic’s Lien  Release Bond?

A Mechanic’s Lien Release Bond is a type of Surety Bond. If a contractor allegedly receives no payment for products or services, he or she can file a Mechanic’s Lien which prevents the other party from selling or transferring property and it allows the contractor to sue the other party.

With a Mechanic’s Lien Release Bond, the surety company guarantees the claim in the event that the court enforces the payment of the claim. It guarantees that the payment will be made if the lien is not successfully contested.

If a subcontractor or other entity has put a mechanic’s lien on your property, you can get a  Mechanic’s Lien Release Bond to remove the lien.

How Does a  Mechanic’s Lien Release Bond Work?

A Mechanic’s Lien Release Bond allows property owners to do with their property what they would if a lien was not present: sell the property, get further remodeling done, etc. In a way, it works as an extension of credit. The bond proves that the property owner has sufficient funds to pay the people involved.

It can also be referred to as a discharge of a Mechanic’s Lien Bond. The word discharge can cause some confusion because a discharge of Mechanic’s Lien Bond (Mechanic’s Lien Release Bond) does not extinguish the mechanic’s lien entirely. It discharges the lien from the property and attaches it to the bond.

The bond is usually issued at a percentage over the lien amount, depending upon the state in which the lien was placed.

Purpose of a Mechanic’s Lien Release Bond.

There are a few types of bonds that tie in with the construction industry. Each of them serves an entirely different purpose.

Two common entities that need to obtain Mechanic’s Lien Release Bonds are property owners and contractors who are obliged to discharge any mechanic’s liens filed by suppliers or subcontractors.

Its purpose is to remove the mechanic’s lien from real property and the mechanic’s lien then attaches to the bond until it is dismissed in some way.

Frequently Asked Questions

Q: Is there only one person responsible?

 A: Sometimes. When building a multi-family property all owners could potentially be part of the process and everyone will be responsible for a portion of the claim.

Q: How long does a mechanic’s lien last?

A: Once filed, the mechanic’s lien will last for a period of one year.  Mechanic’s liens on private commercial projects and on public improvements may be extended for one additional year.

Q: How do I satisfy a mechanic’s lien?

A:  A satisfaction of a mechanic’s lien can be filed with the County Clerk or the public entity where the mechanic’s lien was filed. That is after you either post the Bond or pay off the lien.

When applying, the following information should be included for faster bonding.

1) A completed court bond application – Will provide basic information of the bond being requested, as well as information on the principal requesting the bond.

2) Copy of the mechanic’s lien – A copy of the mechanic’s lien can be uploaded in the online application and will provide information to the amount of the lien and parties claiming that payment is still due.

Call us at 800.921.1008 to speak with a professional regarding your specific situation or apply below for a quick turnaround on your Mechanic’s Lien Release Bond.

 

Bidding War: Preventing Subcontractor Collusion

Collusion is a word we hear a lot lately, did you know that it happens in the bidding process to gain an unfair advantage? According to Construction Business Owner Magazine, it happens in the construction industry by unscrupulous bidders.

Most public and some private companies require a competitive public bidding process to choose the best qualified contractors who will provide the lowest prices, the best services, and the most innovative solutions. The competitive process achieves those goals only when companies compete honestly and ethically and agree to the terms up front. Bid rigging disrupts this natural market competition and often results in shoddy work, cut corners and the use of subpar materials.

Bid rigging occurs when subcontractors (subs), who would otherwise have to compete for the job, covertly conspire to raise their prices or reduce the quality of goods or services to win the project. It’s a criminal act, and fraudsters can be investigated and prosecuted if collusion is discovered.

Here are four of the most common bid-rigging schemes.

  • Bid suppression—This scheme suppresses or limits the number of bids that will be accepted for the project. It occurs when a group of subcontractors secretly assent that some of the bidders will refrain from submitting a proposal. If the bid has already been submitted, the sub may withdraw it. This type of fraud breaches the competitive process so that a predetermined sub in the group will win the bid.
  • Complementary bidding—This scheme is similar to bid suppression. A group of subs conspires to throw the competitive process by predetermining who will win the bid. Unlike bid suppression, in complementary bidding schemes, all participants submit a proposal. Some of the bids will include exclusions or codicils that will disqualify them or render their submission incomplete or nonresponsive. Complementary bid-rigging groups ensure members can be part of the conspiratorial contractor and therefore be awarded a contract at some point for their participation in the fraud.
  • Bid rotation—Just as the name suggests, this fraud scheme involves a collusive group of subs who conspire to “take turns” winning projects. Participants know the others’ pricing up front and price their bids accordingly, thus removing any guesswork from the process.
  • Guaranteed subcontracting—In this bid-rigging scheme, conspirators are awarded pieces of the project in exchange for not submitting a bid that would grant them the entire scope of work. As such, participants have an equal opportunity to be the main sub on the project.

Unfortunately, many general contractors and developers may not even realize their projects involve bid rigging. The following checklist can assist the procurement team in deterring and detecting potential bid-rigging schemes.

  1. Understand market conditions—Contractors and developers know the industry ebbs and flows based on the economy, and the competition and pricing follow suit. Pay attention to current bid pricing on comparable projects to keep a pulse on what things cost.
  2. Provide training—Make sure staff understand the telltale signs of potential bid ridding, such as:
    • Significantly lower prices than have been previously tendered for similar services or goods
    • Identical or oddly similar pricing from multiple bidders
    • Fewer bids than should have been suspected
    • Unnecessary joint bids
    • Seemingly intentional errors or omissions that disqualify an otherwise viable bid
  3. Restrict communication among bidders—Avoid opportunities for bidders to have visibility and contact with competitors. Refrain from hosting group jobsite visits, and use blind copy for any email communications.
  4. Expand the list of potential bidders—Open the request-for-proposal (RFP) process to a broader group of subs or expand the geographical region to increase the diversity of bidders. Another option is to openly state the number of bids required for the RFP to be considered substantial.
  5. Make non-collusion affidavits a standard practice—This should be a regular practice for bidders in all bid documents.
  6. Clearly communicate bid requirements—Provide bid documents that explain what proposals should include and the criteria for their evaluation.
  7. Exercise right of refusal—If the competition feels unfair or raises any red flags of collusion, be empowered to reject the bids and reopen the call for proposals.

Understanding and recognizing potential bid-rigging schemes and setting clear expectations and criteria in all bid documents can help general contractors and business owners achieve the best possible outcomes of their RFPs. More than that, though, is the importance of ensuring public bidding processes are fair, equitable and ethical, and protecting the integrity of the construction industry.

Keep this in mind when you bid, and keep us in mind when you need  Bid, Performance, Payment, Maintenance, and Supply Bonds. Our online application makes it easy to apply for a bond and our excellent customer service (4.9 Stars on Google) and knowledgeable bond underwriters will make sure your bonding goes smoothly. Call us at 800.921.1008, visit us at BFBond.com to live chat with us, or apply for a bond with the link below.

 

Steps You Can Take to Protect Your Business from Employee Theft

An employee slips merchandise into her purse. Or maybe someone makes a company check out to himself, or pilfers supplies from the stock room. Even before you discover the crime, your business may have lost a bundle of money.

A 2016 poll on employee theft found that 80% of embezzlement happens at small businesses.

How Big an Issue Is Employee Theft?

According to our claims data, burglary or theft is the most common reason for small business insurance claims, accounting for 20% of all claims. In some cases, an employee turns out to be the culprit.

You can mitigate the risk and protect your company by making sure you have Crime Bond (Fidelity Bond) to cover losses due to employee theft. But understanding how and why employees steal may help you head off problems in the first place.

There are a variety of ways an employee can steal from a company. For example, workers can steal money, take home items of value, or snag your intellectual property.

Charles Read, an accountant, and CEO of the payroll company GetPayroll/Simon learned about employee theft the hard way when he first started his business. He discovered a receptionist was taking accounts receivable checks, whiting out the company name, writing in her own name, and cashing them at the bank. Read discovered the crime after his company sent a past-due notice to a client. “They sent us a copy of the check with her name on it,” he says. “That’s how we caught her.”

Steps You Can Take to Protect Your Business.

Fortunately, you might not have to go through a similar experience if you put basic security measures in place. BF Bond is here to help. Here are four steps to take to protect your company from sticky-fingered employees:

Screen new hires carefully.

Preventing employee stealing begins during the hiring process. Checking out an applicant thoroughly can save you headaches and money, and it’s crucial to follow employee screening laws in your state.

For example, you can and should check a job candidate’s social media profiles after you conduct a job interview. But only look at public content, and never ask for social media passwords, which can put you at risk of violating federal law, warns the Society for Human Resource Management. If you want to check a candidate’s personal credit, you’ll need to get permission in writing.

Pre-employment screening companies can do a background check for $50 to $200 per person, Springer says. Make sure you check references as well. Even big companies get burned by failing to find out why a candidate left a previous job. “Maybe they were fired for stealing,” he says.

Get employees to sign a computer policy.

When bringing a new employee on-board, ask him to sign a short document stating that the company computer is the property of the business and that you as the employer have a right to check it at any time, If you have a problem, you can go in and look at the computer after the employee leaves for the day,” he says.

Take steps to beef up security.

You should take several actions to reduce opportunities for employees to steal. For example:

Don’t give one employee too much control. For example, if one employee cuts checks, a different employee should sign them.

Get hands-on with finances. Put a policy in place that you personally must sign off on payments above a certain amount.

Keep a tight hold on the company credit card. Rather than getting employees their own cards, if an employee needs to make a purchase, hand them your card, get it back when they return from the store, and check your account soon after. If they need to travel, give them a cash advance and insist on getting receipts for every expenditure.

Lock down goods and checks. Lock up office supplies and, if you sell a physical product, keep strict merchandise controls in place. If you have company checks, keep them under lock and key no matter how much you trust your employees. A cautionary tale: One small business was shocked to discover that an employee they had raised like a daughter was using company checks to buy her groceries.

Employee theft often starts out small — for example, an employee who’s short of cash for lunch “borrows” $10 from the cash drawer to buy a sub and chips, and they pay it back later. Maybe the second or third time, they “forget” to replace the cash, and so on. The key is to remove the temptation as much as possible so they don’t get started.

Watch out for warning signs.

No matter how much you trust your employees, look for telltale red flags that could suggest something is wrong, Springer recommends. These tip-offs include: money problems, a disgruntled attitude, a lavish lifestyle that outpaces their paycheck, personal problems, excessive chumminess with customers or suppliers, and a reluctance to go on vacation or otherwise miss work. Of course, these signs don’t always signal stealing, but might mean that an employee merits closer scrutiny.

Acquire a Fidelity Bond from BFBond.com to protect your business interests.

These types of bonds are meant to avert serious financial damages and losses to companies in the event of any fraud, forgery, alteration or embezzlement.

BFBond.com Crime Bonds are valuable insurance tools for any business, especially those dealing with money.

Fidelity Bond Types.

Fidelity bonds represent a high level of flexibility. There are currently two major types available.

The first is known as a First Party Fidelity Bond, which, in essence, is to protect a company from its employees if they steal something of the company assets, or commit fraud.

A First Party Fidelity Bond will cover nearly all company damages arising due to financial crimes against a company or its customers.

The second main type is a Third Party Fidelity Bond, which protects businesses under similar circumstances. However, a Third Party Fidelity Bond offers ultimate coverage against most illegal acts such as fraud, scams, or other thefts committed by employees.

If theft happens, take action quickly to mitigate the damage and prevent further losses. If you suspect that an employee has stolen from you, you need to let your surety company know right away,  Inform them that you’re investigating the matter and will report back with details and documentation of how the theft occurred.

The protection offered by Fidelity Bonds is important because a stealing employee can rob a small business of thousands — or even tens or hundreds of thousands — of dollars that can make or break a small business.

Applying for a Fidelity Bond is not difficult, as we’ve simplified the process for you into easy to understand steps, which can be found on our Fidelity Bond application here. You can also call us at 800.921.1008, read more about Fidelity Bonds and live chat with us at BFBond.com.

 

Maryland General Contractors: Senate Bill 853 Means More Liability

Come October 1st 2018, a general contractor will become jointly and severally liable for subcontractors’ failure to pay employees!

 

With this new law now in place, general contractors’ policies towards their subcontractors and their requirement for subcontractors’ surety bond status may change significantly. Wage claims in Maryland can be made for as much as three years after an incident. As a result, general contractors are sure to demand that subcontractors obtain and maintain bonds for at least three years after performing work on a project.

 

What’s more, since a court may award claimants with as much as three times the wages owed, subcontractors will likely be required to obtain bonds in amounts that will be able to cover high claim amounts.

 

Call us at 800.921.1008 or visit BFBond.com to get bonded quickly at great rates! 

Secondhand dealers can now apply for a bond online at BFBond.com

Bernard Fleischer & Sons / BFBond.com now offers the bond required by the NYC Consumer Affairs Department for Secondhand dealers in an EZ online application with no credit checks. Apply > Pay > Receive Bond via email. Apply here www.bfbond.com/bfapps/NYSHD/NYSecondHandDealer.php

 

A Secondhand Dealer General license is required to buy or sell secondhand articles in New York City. Buying and selling automobiles or firearms requires separate licenses.

Used clothing stores, garage sales, used boat dealers, and not-for-profit organizations are exempt from the Secondhand Dealer General license requirement. Not-for-profit organizations must keep proof of being registered as a nonprofit and must maintain books and records on their premises.

 

Bernard Fleischer & Sons / BFBond.com is a nationwide surety bond broker offering simple, fast solutions for all types of surety bonding in the United states. We offer competitive pricing with multiple carriers as well as world class support. For free information on your surety bonding needs, call Jose at 800-921-1008 or visit us at www.bfbond.com to receive a free quote.

Crime Bonds

The Importance of Crime Bonds.

Crime bonds protect against loss from dishonest employees

White-collar crime should be of great concern to business owners. It can be occurring now, right in front of us by people we trust. How many times have we read in newspapers of the kind old bookkeeper, polished senior executive, well-respected city manager, and other people we deal with day to day who are arrested for stealing from their employer or otherwise taking funds that did not belong to them.

 

The two major types of Fidelity bonds:

The first is known as a First Party Fidelity Bond, First-party fidelity bonds protect businesses against intentionally wrongful acts (fraud, theft, forgery, etc.) committed by employees of that business.

The second type is a Third Party Fidelity Bond, Third-party fidelity bonds protect businesses against intentionally wrongful acts committed by people working for them on a contract basis (e.g., consultants or independent contractors).

White collar crime can have serious financial consequences, even threatening a private company’s survival. Bernard Fleischer & Sons, Inc. offers a solution to handling crime losses such as dishonesty, forgery, robbery, safe burglary, computer fraud and other criminal acts committed by employees, leased employees, volunteers or someone required to be bonded under ERISA, through a Crime Insurance Policy.

For more information about Fidelity/Crime Bonds Click here, call 1.800.921.1008 or visit our website to get a free no obligation Fidelity/Crime Insurance quote.

Workplace Crime costs $50 Billion a year, protect your business with Fidelity Bonds.

There is a hidden risk facing small businesses across the country that often goes unnoticed until it suddenly rips through a firm’s finances: employee theft. It’s a crime that is costing U.S. businesses $50 billion annually, with 7% of annual revenues lost to theft or fraud according to Statistic Brain.

Studies found that U.S. businesses affected by employee theft lost an average of $1.13 million in 2016. Small and midsize businesses were hit disproportionately, representing 68 percent of the cases. Their median loss in 2016 was $289,864.

Despite the alarming levels of embezzlement taking place, it isn’t top of mind for many small-business owners.

When one hears the word “Bonds” it brings to mind an investment. But there are other types of bonds that have nothing to do with investing; they relate to business operations and function similarly to insurance.

Surety Bonds are like insurance. They back up a promise to do something; if the promise is breached, the bond pays off to complete the promise.

One common Surety Bond type is a Fidelity Bond (or Crime Bond). Fidelity bonds provide insurance against loss from employee misconduct, such as theft or embezzlement, which is not otherwise covered by a company’s regular insurance coverage. A bond can provide blanket coverage for the actions of all employees or can be tailored to cover one or more specific employees.

When safeguards like thorough employee screening and careful supervision aren’t enough, fidelity bond coverage to protect against employee theft is recommended. If one or more of your employees are entrusted to handle cash or other valuable assets, a Fidelity Bond can protect your business.

Coverage can include:

  • Employee theft – Stealing merchandise.
  • Forgery or Alteration – Checks, gift cards etc.
  • Theft of Money and Securities –  Registers etc.
  • Robbery of safe, burglary of other property, stones, bullion, etc.
  • Computer fraud, funds transfer, diverting funds to personal accounts.
  • Money orders and counterfeit money.
  • Theft from third parties, on loan, deliveries, on customer’s premises.

 

The cost of Fidelity Bonds: There is no fixed rate for bonds. There are many factors that impact cost, such as the extent of coverage, whether there is a deductible (if allowed), and the surety company that issues the bond. As a rule of thumb, a fidelity bond can cost about ½% to 1% of the coverage obtained.

Surety and fidelity bonds are a risk management tool, it is helpful to discuss your business requirements with an experienced, trusted agent like BFBond/Bernard Fleischer & Sons Inc. We can advise you what coverage is best for your business when traditional insurance doesn’t provide the protection you want or require.

Becoming a NYC Process Server

How to Become a NYC Process Server.

A process server is a person that delivers important legal documents to individuals for lawyers or other legal services. It is the job of the process server to deliver the documents while adhering to the laws of the state. If you are interested in becoming a New York process server, there are no educational or training requirements but know that in New York City, there is a surety bond licensing requirement to be met.

Step #1 Apply for License

Apply for your license in New York City if you anticipate serving five or more processes in a year to Manhattan, Brooklyn, the Bronx, Staten Island, and Queens. Apply online or, if you prefer, download and complete the Basic Individual License Application from the NYC Department of Consumer Affairs (DCA).

Step #2 Provide a background check

Step #3 Turn in passport sized photo

  • If you submit your application in-person: applicants can be photographed at the DCA Licensing Center at no cost.
  • If you submit online: applicants can upload an image file of a digital passport photo.

Step #4 Obtain your required Process Server Surety Bond.

This is a Bond that must be maintained per your license. A process server bond is a type of surety bond that protects the courts and the clients you serve.

In New York a Process Server Bond needs to be in the amount of $10,000 for individuals or $100,000 for agencies. The amount you pay for your bond (called the bond premium) is largely dependent on your credit score. Generally, applicants with good credit can secure their bond at a rate of 1-4%. Applicants with not-so-great credit could have to pay up to 15% of the total bond amount.

Step #5 Complete paperwork.

Depending on if you are an agency or an individual, you will have different paperwork.

For a more detailed checklist of all the required paperwork, see the New York City Consumer Affairs website.

Step #6 Pay Licensing fees (A 2.49% convenience fee is added if you submit your application and paperwork online)

Step #7 Submit license application

In person: File in person at DCA Licensing Center 42 Broadway, New York, NY 10004

Online: Click “Apply Online” at New York City Consumer Affairs website.

Keep in mind that your application will be denied if you fail to submit all required documents and If you choose not to obtain a license you will be unable to serve more than 5 processes in New York City which will limit your earning potential.

 

The NYC Department of Consumer Affairs  recommends BFBond.com/Bernard Fleischer & Sons Inc. (Formerly Advanced Insurance Services) as a Surety Bonding agency for your consideration, apply online at BFBond.com/process.html or visit our office. We are conveniently located at 29 Broadway, Suite 1511 New York, NY 10006 directly across the street from the Department of Consumer Affairs’ office.

For more information, visit us at BFBond.com, live chat with us or call 800.921.1881


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