Bonds

The Contract Surety Bond class is made of of those bonds that do not fit into the commercial bond class and that guarantee obligations related to specific contracts. There are four types of contract bonds. A bid bond Is a bond which provides financial assurance that the bid has been submitted in good faith, that a contractor will enter into a contract at the amount proposed, and will provide the appropriate performance and payment bonds if so required. These bonds are used by obligees (project owners) to pre-qualify contractors that submit proposals. A performance bond guarantees performance of the terms of a contract. These bonds frequently incorporate payment bonds (labor and materials) and maintenance bonds as part of the contract surety bonding package. Bonding protects the project owner from financial loss should the contractor fail to perform the contract in accordance with its terms and conditions. A payment bond guarantees the payment of subcontractors, laborers, and materials suppliers associated with the project. Payment bonds are issued for the protection of those parties that supply labor or materials and to eliminate the likelihood that they will file mechanic's liens against the project property. A maintenance bond guarantees upkeep (maintenance) of the completed project for a specified period of time after completion. These bonds provide protection for defective workmanship and/or materials. Keeping up with the legal cases and construction sector-specific happenings is imperative.

BID BOND

Is a bond which provides financial assurance that the bid has been submitted in good faith, that a contractor will enter into a contract at the amount bid, and will provide the appropriate performance and payment bonds. These bonds are used by obligees (project owners) to pre-qualify contractors submitting proposals. Some project owners may in lieu of a bid or tender bond request a letter of bondability (statement bond bonding limits) from a contractor.

PERFORMANCE BOND 

A performance bond guarantees performance of the terms of a contract. These bonds frequently incorporate payment bonds (labor and materials) and maintenance bonds. Bonding ultimately aims to protect the project owner from financial loss should the contractor fail to perform the contract in accordance with its terms and conditions.

PAYMENT BOND 

A payment bond covers payment of subcontractors, laborers, and materials suppliers associated with the project. Payment bonds are issued for the protection of those supplying labor or materials to a particular bonded project.

MAINTENANCE BOND

A maintenance bond guarantee upkeep (maintenance) of the completed project for a specified period of time after completion. These bonds protection from defective workmanship and/or materials.

SUPPLY BOND 

A supply bond, also referred to as a material supply bond is essentially a performance bond except rather than guaranteeing completion of a particular project the obligation is for the supplier to fulfill a materials procurement agreement at the price offered for the term of the agreement.

SUBDIVISION BOND (SITE IMPROVEMENT BOND)

A subdivision bond, also referred to as a site improvement bond, completion bond or plat bond, is essentially a performance bond however there are some key differences. We have a broad appetite for developer's surety bonds in all states and territories!

CONTRACTOR'S LICENSE BOND

A “contractor’s bond” is one of the most common surety bond needs in the North American market but what does that term mean? MANY different parties may require a contractor to provide a "bond" that is not a contract performance obligation. License & Permit Bonds (L&P) are required by states and municipalities to issue a contractor license. Third party fidelity bonds also known as dishonesty bonds, insure dishonesty losses resulting from the contractor and his or her employees’ actions while providing services on a client’s premises (this is what a party refers to when he says, "We are bonded.").

LETTER OF BONDABILITY (LIMITS)

A statement of bonding limits or "bondability letter" is a simple declaration of a surety underwriter that a particular contractor qualifies for a specific level of access to contract sureyt bond capacity. These can be binding or non-binding.