A contract Bond is a type of surety b0nd that is used for construction projects. The purpose of the contract bond is to make sure that the project is completed and that all those involved in the project including the general contractor, sub-contractor and suppliers are paid. There are different reasons for having a contract bond that will vary depending on the type of project involved. There are Bid bonds, Payment bonds, and Performance Bonds each of which serves a specified purpose, as follows:
- Bid Bonds- Keep contractors form increasing the bid price after a contract is awarded.
- Payment bonds - ensures that contractors pay all subcontractors and pay for all material used.
- Performance Bonds - ensures that the contractor completes the project according to the time period specified in the contract. When a contract fails to meet the terms set forth in the contract, a claim against the bond can be made.
How do I get a contract bond:
The contract Bond is typically arranged by the surety agency for the general construction and usually allows the sub contractor to be covered by the bond.
In order to receive a bond the contractor must submit on application together with supporting information as to its financial and fitness. Also the character of the applicant and its ability to show that they are capable of running a business, and to complete projects of the type that the bond covers must be shown.
Move and more owners, both public and private are now requiring some form of contract Bond, from their contractor. To learn more about contract bonds and to see if you qualify, call us today for a free consultation we also write all other types of surety bonds and would be happy to help with any of your bonding needs. Please call us or email us today to find out how we can assist you.
Call us today for a free consultation for all types of Surety Bonds including Court Bonds, License Bonds, Probate Bonds and Permit Bonds. Simon Insurance is based in South Florida and serves clients throughout the United States and Florida including Miami, Ft Lauderdale, West Palm Beach, Tampa, St Petersburg, Cape Coral, Orlando and Jacksonville. We encourage you to browse our website and call or email us today to find out how we can assist and help you.