Different Types of Surety Bonds
Bid Bond
The financial guarantee that a bid has been submitted in good faith and adequate capacity
Performance Bond
The guarantee that a contractor will complete the construction project according to the terms and conditions of the underlying contract
Payment Bond
The guarantee that a contractor will pay their subcontractors, laborers, and material suppliers.
Maintenance Bonds
The guarantee of a maintenance provision outlined in an underlying contract.
License & Permit Bonds
The guarantee of compliance regarding specific ordinances requirements.
Does my company need to provide performance, payment and maintenance bonds?
- Under The Miller Act of 1935, the Federal Government requires performance and payment bonds on contracts valued over $100,000 for the construction, alteration, or repair of any public building or public work. Local and State governments have established similar acts requiring performance and payment bonds on all publicly funded construction projects.
- General contractors can also require subcontractors to post performance and payment bonds. Being prequalified for surety bonds demonstrates to a contractor’s customer that they have the experience, capital, and financial wherewithal to complete a project.
