A Contract Surety Bond is a guarantee, in which the surety guarantees that the contractor, called the “principal” in the bond, will perform the obligation stated in the bond. These bonds are most commonly referred to as bid, payment, and performance surety bonds. The person or firm to whom the principal and surety owe their obligation is called the “obligee.” On bid bonds, performance bonds, and payment bonds, the obligee is usually the owner. Where a subcontractor furnishes a bond, however, the obligee may be the owner or the general contractor or both. These bonds are most often required of contractors performing work for local municipalities, state government, and federal government. Subcontractors may also need a contract bond that is required by a General Contractor who is on a public or federal job. Private owners and banks also from time to time will request a performance and payment bond to secure their investment and avoid liens on private construction projects.

The most common type of Contract Bonds include:

Bid Bond 
Provides financial assurance that the bid has been submitted in good faith and that the contractor intends to enter the contract at the price bid and provide the required performance and payment bonds, if low. 
Performance Bond
Guarantees that the performance of the work will be completed on schedule and according to the plans and specs set forth in the contract.
Payment Bond
Assures that the contractor will pay certain workers, subs, and  material suppliers.

We have several different options to get you set up for a contract surety bond program.