Contract Surety Bond is a guarantee, in which the surety guarantees that the contractor, called the “principal” in the bond, will perform the “obligation” stated in the bond. These bonds are most commonly referred to as bid, payment, and performance surety bonds. The person or firm to whom the principal and surety owe their obligation is called the “obligee.” On bid bonds, performance bonds, and payment bonds, the obligee is usually the owner. Where a subcontractor furnishes a bond, however, the obligee may be the owner or the general contractor or both. These bonds are most often required of contractors performing work for local municipalities, state government, and federal government. Subcontractors may also need a contract bond that is required by a General Contractor who is on a public or federal job. There Private owners and banks also from time to time will request a performance and payment bonds to secure their investment and avoid liens on private construction projects.
The most common type of Contract Bonds include:
Provides is financial assurance that the bid has been submitted in good faith and that the contractor intends to enter the contract at the price bid and provide the required performance & payment bonds, if low. Bid Guarantee/Bid Security. Caution against putting up ILOC or Certified Check.
Guarantee’s that the performance of the work will be completed on schedule and according to the plans & specs set forth in the contract.
Assures that the contractor will pay certain (according to law) workers, subs & material suppliers.
We have several different options to get you set up for a contract surety bond program.
If you have a current bond need, or looking to get pre-qualified, click here to apply now.