Contract, Performance & Payment Bonds Surety, explained.
Match the surety obligations to the contract before work begins.
Contract, Performance & Payment Bonds
Contract surety bonds address obligations tied to a project or contract. A bid bond relates to the bid process, a performance bond addresses the principal’s performance obligations, and a payment bond addresses specified payment obligations to eligible subcontractors or suppliers. Each bond responds according to its own wording; it is not general liability insurance.
Inside a Contract, Performance & Payment Bonds policy.
Is this for you?
Plain language answers.
Not by itself in every case. Performance and payment obligations are addressed by their respective bond forms, often issued together. Review what the contract actually requires.
No. The surety reviews financial condition, experience, capacity, existing work and the proposed contract. Approval, terms and timing are not guaranteed.
No. A principal and other indemnitors may be required to reimburse the surety under the indemnity agreement. Review those obligations before signing.
Bond availability, premium, collateral and indemnity requirements are subject to surety underwriting and the exact bond form. A surety bond is not a substitute for liability or property insurance. No bond is issued or coverage bound by an inquiry.
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