Major Forms of Construction Surety Bonds
Construction and Surety Bonds.
A Bid Bond
Provides financial assurance to the owner of a projected job, that the bid has been submitted in good faith and that the bidder intends to enter into the contract at the price bid. The bid bond also provides assurance to the project owner that should the bidder be successful he/she will provide any other required bonds as stipulated (such as a performance bond or labor & materials bond).
A Performance Bond
A Performance bond protects the project owner from financial losses if the contractor fails to perform in accordance with contractual terms and conditions. Performance bonds are issued at either 50% or 100% of the contract price.
A Labor And Material Payment Bond
A labor and material payment bond protects the interest of subcontractors, material suppliers and laborers against forfeiture of payment from the general contractor. This type of bond is issued up to 100% of the contract value.
- There are other construction bonds, such as, a warranty or maintenance bond and a supply bond - we have provided a brief review of the performance bond and a couple of other closely associated bonds.
If you are looking to embark on the process towards obtaining bond facilities. Please call to discuss how we can provide you the necessary applications to initiate this process.
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