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What is a Bond For Construction?
A bond for construction is a general term that describes the many different bonds that are often needed when contracting large municipal or private projects such as roads, buildings, or bridges. These surety bonds are means to protect the purchaser of the bond as well as the purchaser for the contract. From bid bonds to maintenance bonds, bonds for construction are an important part of the process of obtaining a large contract. Bonds for construction are often required for federal, state, or even local projects.
Because construction projects are usually larger, they run the risk of bigger monetary loss if something goes wrong. These various bonds for construction are meant to protect the owners or investors of the project from faulty, incomplete, or fraudulent work provided by contractors. The bonds also confirm that the contractor has a reputable work history and financial backing for the project. It is very hard to get a bond for construction if the contractor has had multiple claims made against bonds in the past. If a contractor bids on a project and has the appropriate bonds, it shows that a surety is willing to work with them and was able to get them the bonds needed to help grow their business. Obtaining these bonds for construction are crucial.
What are the different types of Bonds for Construction?
Bid BondsA contractor will present a bid bond, a type of construction bond, along with their bid to the owner before the start of a project. This type of bond is crucial for the competitive process of bidding that occurs with construction projects. Contractors can also use this type of bond to bid on projects who already have a bond for construction. Bid bonds protect the owner of the project in case the contractor decides to back out of the project or fails to meet the requirements in the signed contract.
Payment BondsThis bond for construction is issued to a contractor, and required before the start of the project to ensure subcontractors, laborers, and material suppliers are paid for the work they do. Since subcontractors and suppliers can have the right to place a lien on the property if they are not paid, the hiring party may want to ensure that the contractor has a payment bond. This type of bond pays suppliers and subcontractors if the general contractor does not pay as agreed.
Performance BondsA performance bond is issued to protect all parties, guaranteeing the fulfillment of a particular contract. This type of bond for construction ensures satisfaction of the completion of a project. Unlike a payment bond, the performance bond is used to ensure the work done on a project is completed based on the standards set in the original contract. This means that the owner cannot ask for more than what was agreed to and the contractor cannot provide less.
Maintenance BondsA maintenance bond is a surety bond for construction used as a warranty for the contractors work for a period of time after project completion in case of defects or project issues. This bond ensures that the contractor will provide services to repair or correct any faulty work that was found after the project was completed. There will always be a set period of time after the completion of the work where the contractor is contractually obligated to make repairs.
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Bonds for Construction
Do you want to grow your construction business but you can’t seem to win bigger bids because getting the bond for a large construction project has proven to be more difficult than you thought? If the answer is yes, you need to contact our team today. We have a proven track record for placing bonds when other companies have turned people away. Whether you are just starting out or you’ve had financial struggles, we have specialty programs and relationships with top insurance companies to help you get the bond you need to grow your business. Don’t let financial hardship stop you from growing your business; we can help.
The construction industry can be cutthroat, which is why we work so hard to help people like you worry only about your business. We know that you will need multiple bonds for construction projects. We get you the bonds you need and require only the minimal work from you because we want you to focus on running your business. When laws change or bonds are expiring, our team makes sure to inform you and take care of any changes necessary. When you choose The Surety Place, you are choosing a team.
Surety Place – National Capabilities With A Local Feel
The Surety Place has a team of dedicated account managers who are highly trained underwriters and provide our agents and clients with tailored bonding solution for their individual or corporate needs. Surety access can be limited in today’s marketplace; but with Surety Place as your partner, you’ll find the white-glove service you have been looking for. With over 50 years of combined surety experience, our team has the answers you are looking for when it comes to your bond for construction. As industry leaders, we know how important it is to get the bonds you need at an expedited pace and for a good rate. We want to bee the surety to help your business grow.
There is not a bond too big or too complicated for our team. Poor credit, financial hardship, fast growth, or just getting your company off the ground, we have options for you to choose from. Because of our specialty programs, we can say yes when a lot of other sureties will turn you away.
We understand business and how difficult it can be when something that seems like such a small piece of the puzzle gets in the way of closing a deal or moving forward. We take that pressure off your mind so YOU can get back to work.
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