SURETY BONDS

What is a Contractor Bond?

Jan 072022
 

Contractor license bonds are legally enforceable contracts binding together three separate parties.

Principal = Construction professional buying bond (ie. Plumber, Roofer, Brick Layer, etc.)

Obligee = Entity requiring the contractor to be bonded (General Contractor, homeowner, City or Municipal Permit Department, etc.)

Surety = Company issuing bond (through our agency-currently using RLI, OR Surety and CBIC)

If a contractor fails to fulfill the terms of the contract, the obligee can present a claim against the bond for compensation for damages. In turn, unlike traditional insurance, a surety will not absorb the loss. The contractor is expected to reimburse the surety for any money it pays for the claim settlement. The surety Underwriters consider the policies they write to have no risk. However, in the underwriting process, some types of bonds are dependent on the individuals application information and credit.

Surety Bonds in Action

Dec 152021
 

If you need a surety bond, we can help you!

All bonds have names, know the name of your bond.

Examples of some of the bonds we provide for our customers:

  • Performance Bond or Contractor Bond – guarantees to a project owner that the contractor will complete its job according to the terms and conditions of the contract.
  • License and Permit Bond – A license and permit bond protects consumers from harm by guaranteeing businesses will adhere to laws and other regulations.
  • Maintenance Bond – insures the owner of a completed construction project for a specified time period against defects and faults in materials, workmanship, and design that could arise later due to shoddy workmanship.
  • Payment Bond – guarantees that the contractor will pay their obligated labor and material costs.
  • Right of Way Bond – A right of way bond is a type of license and permit bond that guarantees the performance of work in a publicly owned right of way. ROW bonds are typically required before obtaining a permit or starting any work, whether that be on or involving the public right of way.
  • Site Improvement Bond – A site improvement bond is a bond required by developers, builders or individual(s) to guarantee successful completion of subdivision work to a public entity. This bond ensures certain improvements will be made to a property as the terms of the projects contract says.
  • Surface Restoration Bond
  • Sidewalk/Curb/Gutter/Driveway Builder’s Bond
  • Commercial Water/Wastewater Installation Bond
  • Paving Bond
  • Construction Bond
  • Street & Storm Drain Bond
  • Parkway Contractor’s Bond
  • Fidelity Bond/Dishonesty Bond – insures an employer protection against losses that are caused by its employees’ fraudulent or dishonest actions. This form of insurance can protect against monetary or physical losses.

Who Needs a Performance Bond?

Dec 122021
 

A Performance Bond (or Contract Bond) is a surety bond issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor. Performance Bonds act as guarantees to a project owner that the contractor will complete its job according to the terms and conditions of the contract. A Performance Bond provides financial protection to the project owner in the event of default on the part of the contractor.

In general, Performance Bonds are issued as part of a ‘Performance and Payment Bond’, where a Payment Bond guarantees that the contractor will pay their obligated labor and material costs.

Do you need a Performance Bond? We can help, call us at 817-861-1200.