Contract bonds are needed to perform work or services outlined in a contract, usually for construction projects. There are several types of contract bonds including:
Bid Bonds are bonds which provide financial assurance that the bid on a job has been submitted in good faith, that a contractor will enter into a contract at the amount bid, and post the appropriate performance bonds. These bonds are used by project owners to pre-qualify contractors submitting bids on contracts.
Maintenance Bonds ensure that workmanship is free of defects for the specified period of time after the job is completed or a claim can be filed on the bond.
Performance and Payment Bonds
Performance and Payment Bonds cover the performance of the contract in accordance with its terms and conditions and ensure that the principal will pay all subcontractors and suppliers.
Supply Bonds guarantee that the contractor will deliver the materials and goods according to the contract.