Contractor Bonds
Contractor bonds, including bid bonds, performance bonds and payment bonds, are often required by entities that hire contractors. Unlike license bonds, contract bonds cover a contractor for a particular project and are sold on that basis. Brief summaries of each of the different type of contract bonds are listed below. You’ll notice that each bond type has a link to a page with more detailed information. Quote and purchase your next bond from The Bond Stop – it’s quick and easy!
Contractor Bid Bonds
A Bid Bond is submitted by the contractor in conjunction with a bid for a specific project. A construction bid bond typically ranges between 5% to 20% of the total bid for the project. Bid bonds were designed to provide the developer of the project with financial assurance. Bid bonds guarantee that contractors who are awarded construction projects will enter into the contract with the developer and also post performance and payment contract bonds.
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Contractor Performance Bonds
A Performance Bond is submitted by the contractor to the developer of the project once the project has been awarded. Performance bonds guarantee performance by the contractor according to the contract specifications, terms, and conditions. The issuing surety company backs this guarantee up to the financial limit of the bond which is often 50% or 100% of the full contract amount.
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Contractor Payment Bonds
A Payment Bond is also submitted by the contractor to the developer of a project once the project has been awarded. Payment bonds guarantee that the contractor will pay financial obligations for labor and materials, including those from subcontractors and suppliers, which are associated with the contract. The issuing surety company guarantees the payment bond up to the financial limit of the bond which is often 50% or 100% of the full contract amount.
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The Bond Stop works with contractors everyday to find the right contractor license bond for their individual situation. Call us now at 619.464.1154 to get your Contractor Bond today.