Three party agreements in which the issuer of the bond (the surety) joins with the second party (the principal/contractor) in guaranteeing to the third party (the obligee) the fulfillment of an obligation on the part of the principal.
Provides financial assurance that the bid has been submitted in good faith. A bid bond assures that the contractor will enter into the contract at the bid price. It also assures that the contractor will be able to obtain the required performance/payments bonds.
Guarantees the contractor will complete the project per the terms of the contract.
Labor & Material Payment Bonds:
Assures that the suppliers, laborers, and subcontractors will be paid if the contractor defaults.
Guarantees defective workmanship and materials for a stated period of time.
Local authorities require a guarantee that the landowner completes mandatory public improvements that builders & developer make to their property.
Also known as fiduciary bonds; guarantee the performance of fiduciary services in compliance with a court order (e.g. Guardianship Bond, Executor Bond, etc.).
License & Permit Bonds:
Required by State and local officials (to engage by a certain business).
Site Improvement Bonds:
Required to ensure public property will be restored upon the completion of a private project.
Secure payments to suppliers.