Surety bonds play an important role in protecting the consumer. Without surety bonds the consumer would be exposed to fraud and breach of contract with no recourse other than dragging the principal to court.
Good practices in hiring a contractor:
Step one
Make sure that the contractor is licensed and bonded. Also make sure that your contractor has the proper insurance. For many states your can visit the contractors licensing boards website to see if a contractor is licensed as well as the status of their surety bond. You can also see a list of complaints or disciplinary actions taken against the contractor.
Step two
Don't just settle with on bid shop around and obtain at least three bids.
Step three
In most cases you can find the materials cheaper, so buy them yourself. This can also insure that you are getting what you are paying for.
Step four
Make sure that you are abiding by the state and local laws for zoning and permits.
What do you do if you have problems:
If you gave money to the contractor and they decided never to come back with your materials you have a few options. Hopefully you hired a licensed and bonded contractor. If you have hired a licensed contractor you simply call the contractor licensing board and request to place a claim on their surety bond. If the claim is valid the surety company depending on the surety bond form the surety may pay a contractor to complete the job or reimburse you for the money lost. If you haven't hired a licensed and bonded contractor you will probably have to take them to court. I hope this has helped you if you want to avoid these problems make sure that your contractor is licensed and bonded.