Toll Free: 866-430-3322 7:30AM - 4:30PM MST

Want to stay connected and learn about Bonds? Sign up for our newsletter!

X
ANNOUNCEMENT! NEW PAYMENT PORTAL!
CLICK HERE TO ACCESS

Contract Surety Bonds for Construction Projects

The Surety Place specializes in contract surety bonds needed for construction projects and beyond. Whether you are just starting out or well-versed in the construction industry requirements, our team can help you get the right contract bond for your project. We work with only ‘A’ Rated sureties, can place bonds in all 50 states and have access to specialized bond markets utilizing SBA bond Guarantee program, credit driven programs, and non-standard markets. Because of our cumulative industry knowledge and experience, we offer our customers a tailored bonding solution. 

Contract surety bonds are often referred to as construction surety bonds because they are typically a requirement of a bid or RFP and are written into the contract as a prerequisite of the construction project. A contract surety bond is a financial guarantee that protects the parties involved in a construction project. These bonds provide assurance that a contractor will fulfill their contractual obligations. A construction surety bond is an essential tool for risk mitigation in the construction industry. The bond provides confidence to project owners that their investment is protected, while assuring subcontractors and suppliers that they will be compensated for their contributions to the project. A contractor’s reputation benefits from obtaining surety bonds due to demonstrating their financial stability and trustworthiness, which can help them secure future contracts and projects.

The three parties involved in a contract surety bond are as follows:

Types of Contract Bonds

Bid Bond

BID Bonds are typically required during the bidding process for a construction project. This is a good-faith guarantee that if the bidder wins the bid, the contract will be completed according to the bid terms, including the posting of the performance and payment bond. Bid bonds are generally between 5% and 10% of the total contract value. Most contracts allow at least 10 days for the final bond to be supplied after the bid bond has been accepted and the contract has been awarded.

Performance and Payment Bond 

Performance Bond – A performance bond is issued once a contractor is awarded a construction contract and is often issued in conjunction with a payment bond. This bond guarantees that the contractor will complete the project according to the terms and conditions outlined in the contract.

Payment Bond –A payment bond is provided to assure that subcontractors, workers, and material suppliers get paid in a timely manner for the job they accomplish according to the terms and conditions outlined in the contract. 

Maintenance Bond 

A maintenance bond is a form of contract bond that may be required after the project is completed. It generally provides for a one-year warranty on the workmanship in accordance with the agreement’s specifications while adhering to state requirements. It stipulates that the contractor completes all work or repairs required on the project within a certain time limit. The maintenance bond will specify the time in which a contractor is legally obligated to remedy any faults on the project.

Improvement Bond or Subdivision Bond

An improvement bond, also known as a subdivision bond or a contract bond, is required of developers or home builders and is used to ensure the completion of obligatory upgrades to public structures or entities that the local community uses on a regular basis. These bonds safeguard a particular city, county, or state. The principle of a public construction project promises to execute obligatory upgrades to public entities as part of an improvement bond since such improvements are for the better welfare of the community. Maintenance of roadways, sidewalks, drainage systems, gutters, sewers, and public buildings are examples of public construction projects that may need an improvement bond.

 Service/Supply Bond or Commercial Contract Bond

A Service bond guarantees a particular service (i.e., janitorial service, security service, etc.) per the terms of the contract. A supply bond secures that the materials, furniture, and supplies (i.e., one-million widgets, wind turbines) will be delivered and utilized specified in the signed contract.

Get Your Construction Bond Quickly

This is the simple part; select The Surety Place as your bonding company. Contract bonds are essential for every construction company in one way or another, and getting a decent rate is critical for your business. Our underwriters have a combined 50 years of experience writing contract bonds. Connect with The Surety Place https://www.suretyplace.com/connect/. Contact one of our surety specialists if you are a contractor who is ready to get bonded.

Give our experts a call at 866-430-3322
Email us at info@suretyplace.com

Or apply online today www.suretyplace.com/request-bond/

We are surety industry experts. We provide twenty plus years of customer service, client relationship building, affiliation with “A” rated sureties, and access to specialty programs around the country. 

The Surety Place is licensed to do business in all fifty states. We are available to assist you with all your custom bonding needs without having to make an appointment. We can write your bonds when no one else can and serve as your bonding company throughout the duration of your firm’s existence. You and your company will never be disappointed if you place your trust in our team of professionals.

June 29th, 2021
Surety Place