CONTRACT SURETY
Contract surety bonding protects a project owner from financial loss should the bonded contractor fail to fulfill the contract in accordance with it’s terms and conditions. Performance bonds are usually packaged with payment bonds.
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.
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.
The Contractor’s Guide to Surety Bonds
A primer to contract surety bonds in the construction industry. This resource demystifies bonding, contract bond account prequalification, and legal framework for contractors and professionals navigating the surety bond process for public and private construction projects. The author, C. Constantin Poindexter is a thirty-year veteran of the surety industry. He is a Chartered Property Casualty Underwriter, holds Associate Degrees in Fidelity and Surety Bonding, Surplus Lines Insurance and Reinsurance. The author currently serves as the Chairman of Janus Assurance Re, is the founder of Surety One, Inc. an international managing general agency, and law partner at VSP, PLLC.
