Embarking on a major renovation of your marina or starting the process of building a new facility is filled with a variety of risks. Maximizing your opportunities to limit those risks will help ensure the successful completion of your project.
One of the ways to help minimize your risk as an owner or developer is to require your general contractor or marina builder to carry a performance and payment bond. Your contractor’s ability to be bonded at a favorable rate is a good indicator of the company’s financial security as well as their ability to perform the required work.
When issuing bonds, the surety’s primary objective is to determine whether or not the contractor, or in this case the marina builder, has the experience, the resources and the capacity required to complete the project they are proposing to build. As a result, sureties become very skilled at determining the validity of a company’s financial statements in regard to performance and delivery and are well acquainted with the qualities or characteristics that set one builder apart from another.
For the marina owner, the contractor’s ability to carry a bond at a low rate is equivalent to receiving an unbiased 3rd party endorsement or guarantee of the company’s ability to comply with the contract. The company’s bonding capacity also reveals the company’s financial standing. The most financially secure contractors pay the lowest bond premiums and are backed by reputable sureties in the industry with “A” financial strength ratings by A.M. Best and Standard & Poor’s.
A dock builder that is financially secure is likely to be around 10, 20 and even 30 years from now. A financially weak company cannot provide that same piece of mind to the buyer. Many of the commercial dock systems available today are technologically advanced products with a long service life. Therefore, it is important that your dock provider be around for the long term should you require assistance down the road.
Aside from confirmation of the company’s ability to perform and probable longevity in the market place, a company’s capacity to be bonded may have other benefits for the marina owner including increased opportunities for more favorable lending rates.
The topic of bonding and a surety’s role in a marina construction project can be a complex one with many factors on both the owner’s and the builder’s sides playing a part. If you’d like more information about whether or not it would be beneficial for you to require a bonded marina builder on your project, we’d be more than happy to direct you toward some experts in the field that can help you determine what’s best for you and your project. Email email us at bmi@bellingham-marine.com and we’ll put you in contact with a reputable surety broker who can answer your questions.
