Contract and Commercial Surety Bonds

Surety bonds that are written for construction projects are called contract surety bonds. A project owner (the obligee) seeks a contractor (the principal) to fulfill a contract. The contractor, through a surety bond producer, obtains a surety bond from a surety company. If the contractor defaults, the surety company is obligated to find another contractor to complete the contract or compensate the project owner for the financial loss incurred.

1. Bid Bond: Provides financial protection to the owner if a bidder is awarded a contract but fails to sign the contract or provide the required performance and payment bonds.
2. Performance Bond: Provides an owner with a guarantee that, in the event of a contractor’s default, the surety will complete or cause to be completed the contract.
3. Payment Bond: Ensures that certain subcontractors and suppliers will be paid for labor and materials incorporated into a construction contract.
4. Warranty Bond (also called a Maintenance Bond): Guarantees the owner that any workmanship and material defects found in the original construction will be repaired during the warranty period. contract & commercial surety Commercial Insurance Builders Risk Insurance

Commercial surety bonds cover a very broad range of surety bonds that guarantee performance by the principal of the obligation or undertaking described in the bond. They are required of individuals and businesses by the federal, stated, and local governments; various statues, regulations, ordinances; or by other entities.

1. License and Permit Bond: Required by federal, state, or local governments as a condition for obtaining license or permit for various occupations and professions. License and permit bonds include autodealer bonds, mortgage broker bonds, contractor license bonds, and surplus lines broker bonds. 
2. ERISA Bonds: A type of insurance that protects employee benefit plans from fraud, dishonesty, and mismanagement.  These bonds are required for anyone who manages an employee benefit plan, including employers, plan administrators, and service providers. 
3. Fiduciary Bonds (aka probate bonds): Required of those who administer a trust under court supervision. Typical such bonds are executor and administrator bonds, trustee bonds, guardian bonds, and conservator bonds.
4. Public Official Bonds: Required by statue for certain holders of public office, to protect the public from malfeasance by an official or from an officials failure to faithfully perform duties. Public official bonds included county clerk bonds, tax collector bonds, notary bonds, and treasurer bonds.
5. Miscellaneous Bonds: These are commercials surety bonds do not fit into any of the types above. Included are a wide variety of bonds such as warehouse bonds, title bonds, utility bonds and fuel tax bonds.