Construction Surety Bonds – Apply Now

Construction bonds play a vital role in any construction project. Learn more about these bonds below, or request a quote today.

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How Do Construction Bonds Work?

These bonds guarantee that almost all privately funded projects witness a smooth transition from construction financing to permanent financing. They also provide support to the contractor as well as ensure project completion. On public projects, surety bonds support pre-qualification of contractors, payment protection for subcontractors and contract completion protection for the public.

Types Of Construction Bonds

Here are some of the most common types of construction bonds. Learn more and apply today:

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Bid Bonds provide financial protection to the owner or project developer if a bidder is awarded a contract but fails to enter into the contract and/or provide the required performance and payment bonds needed to move forward. Read more
Performance bonds guarantee that the contractor will complete the construction according to the contractual obligations. If a contractor fails to do so and is defaulted, the project owner can make a claim on the bond to access funds that can be used to pay another contractor to finish the job. The payment bond guarantees the payment of all subs and suppliers on the project. Read more
A subdivision bond serves as a developer’s guarantee that public improvements will be completed to an acceptable quality, in accordance with all applicable regulations. Read more
Supply bonds mandate suppliers to provide materials, equipment and supplies specified in the contract. If the supplier fails to provide the supplies as agreed, the bond amount can be used to reimburse the purchaser for the resulting loss. Read more
A Maintenance bond protects the owner of a completed construction project for a specified time period against defective materials and workmanship that could surface later if the project was completed incorrectly. Read more

Role of Surety Bonds For Contractors

  • In order to pursue certain opportunities a contractor will need to be “bonded”.
  • A contractor will seek out the most competitive terms. This can impact them positively or negatively when it comes to contract award.
  • Surety bonds help bridge the gap between contractors and project owners. They help to ensure the legitimacy of bidders and qualification of the selected contractor.
  • Surety bonds ensure that the construction industry meets certain levels of quality and performance. They also help to minimize the risk to project owners.
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Construction Bond Costs

The typical cost for such can be as low as .5% of the contract amount to as high as 3% of the contract value. This is due to several factors, such as the credit worthiness of the construction firm and the amount of bonds they purchase per year.

Understanding The Claims Process

If a contractor is found to be in default of the contract, a claim can be filed against them. Often times the surety will speak with the contractor. Hopefully, they can come to an agreement about getting things back on track. If this is not possible, then the surety may take over the project by funding the completion of the work and hiring a replacement contractor. If a subcontractor or supplier fulfills their contractual obligation and the contractor does not pay them, they may file a claim. This requires a simple letter to the surety company. In the letter, the subcontractor or supplier explains their justification for filing the claim. The more paperwork the subcontractor or supplier provides the surety bond producer, the better a surety bond producer can make a decision.

How To Apply

Generally, there are two ways to apply for a construction surety bond depending on the size of the project:

First way Fast Track Application

This is an application which is determined by the individual’s credit history. A Fast Track application can be used for projects or contracts under $600,000. The fast track application should be submitted with the following items:

  • Copy of Contract or Bid Specs
  • Job Cost Breakdown

Second way Standard Bond Application

This application is to establish a larger surety program for projects over $600,000. The Standard Bond Application will require:

  • Financial Statements
  • Brief Questionnaire

Get A Quote Today

Secure your free nationwide construction surety bond quote now by completing our easy bond application form. Need assistance or have questions? Contact our surety experts for prompt assistance.

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