Contract Bond

Contract Bonds – Construction Bonds

Contract bond, bid & performance bonds, supply bonds, payment bonds, construction bonds mostly referred to as contract bonds. Contract Bonds guarantee a contactor’s performance. Such contract bonds ensure proper performance by the contractor, adhering to the terms of the contract. In case of failure to perform appropriately, the surety bonding company is liable to pay to the insured or the bond owner’s clients, within the agreed limits of the surety bond. This limit, however, is normally equal to the amount of the appropriated cost of construction. The surety bonding company then reclaims the bond amount from the contractor. We underwrite this bond based on credit, experience and references and approval of this contract bond program is usually within 48 hours depending on the amount of the bond.

 

To Apply for a Contract Bond:

.  for Quick Response Up to $400,000 Limit

 

Download Financial Statement for Bids Over $400,000

 


Type of Contract Bonds:

 

Bid Bond

Bind bonds are required by many projects ( Federal, State, Local or Private) as assurance that a contractor is qualified to perform a certain job. Bid bond is a financial guarantee that if the contractor is awarded the job, they will enter into a formal contract, and provide the required performance and payment bonds. Furthermore, the bid bonds require the contractor to submit the lowest bid on a particular project. On refusal by the contractor to undertake the project, the developer is entitled to the difference between lowest and the next lowest bid. The Bid Bond ensures that the contractor undertakes projects seriously and fulfills his obligations completely.
Payment Bond
The Payment Bond also is known as labor & material bond protects certain laborers, material suppliers, and subcontractors against non-payment. This bond is significant for contractors who do public work. Since mechanic lien cannot be placed against public property, the payment bond will be the only protection these claimants have if they are not paid for the goods and services they provide. The payment bond enforces an obligation upon the contractor to pay the dues owed to the labor and for the materials that are used in the construction of a project. In case the dues are not paid, the owner can be confronted by subcontractors, and ends up paying the dues a number of times.
Performance Bond
Performance Bonds guarantee a contractor’s performance obligations to meet all terms, specifications, and conditions on a contract. Furthermore, this bond ensures the quality of performance by a party against another party, according to the terms agreed in the contract.
Supply Bond
Supply Bonds guarantee that a supplier will provide the supplies, product, material required in the contract. Furthermore, the supply contract can include fabrication requirements as part of the supplied end-product. this bond guarantees that materials comply with the contract document and are thus delivered accordingly. Supply contracts can range from school pencils to structure steel, city buses, pipes, computers etc.
Site Improvement Bond
These bonds are not meant for existing structures, and thereby guarantee remarkable improvements in the site.
Material Bond
This bond guarantees the supply of all necessary material required for the successful completion of the project put on a contract.
Subdivision Bond
Development and subdivision bonds typically guarantee to a city that a real estate developer, builder or landowner will finance and construct public improvements such as streets, sidewalks, gutters, drainage systems, and landscaping, etc. This type of bond is much like the site improvement bond. It guarantees the existing properties that mandatory improvements will be made to them by the city or the state.

Maintenance Bond

Maintenance Bonds are usually part of a performance and payment bonds, wherein a one year guarantee is implied. Separate maintenance bonds are often required if the maintenance guarantee in the contract exceeds one year. These Bonds are limited guarantee against defective materials or workmanship.

Left Menu Icon