What are the Types of Surety bonds?

The three most common types of surety bonds are: Bid Bonds Performance Bonds Payment Bonds

Are Surety Bonds paid monthly?

No. You don't pay month-to-month for sureties. When you are quoted a price for a surety bond, you make a one-time payment.

How do I apply for a surety bond?

Applying for a surety bond, no matter the sort of bond, is to contact a surety agency. For instance, you can reach CSBA here to get started on obtaining your surety bond.

What is a payment bond?

A payment bond ensures that all of a contractor’s laborers, subcontractors, and suppliers are paid on a particular project.

Who requires payment bonds?

Payment bonds are required on almost all public projects. General contractors sometimes require them of their subcontractors, and occasionally private owners will require them.

Who pays for a payment bond?

The contractor, or principal, purchases the bond and pays for it.

Do Payment bonds expire?

Payment bonds expire after the project is completed and statutory timeframe have lapsed.

What is the difference between a surety bond and a payment bond?

A payment bond is a type of surety bond. The only real difference is the qualifying term, in this case, it's "payment" and only notes what sort of surety bond it is.

What does a performance bond cover?

The performance bond covers the owner of the project against losses if the contractor fails to deliver on the project within the contractual provisions.

How long does a performance bond last?

Since performance bonds guarantee the completion of the contract, they last until the project is finished along with any required warranty period included in the agreement.

When can you release a performance bond?

Usually, a performance bond is released when the project is completed, though some public projects stipulate that a contractor gives a warranty following completion that the performance bond covers.

What is the difference between a performance and a payment bond?

We have a detailed article that explains the differences here , but the short answer is that the performance bond secures the contractor's promise to complete a job within the terms and conditions outlined at the agreed price while the payment bond protects subcontractors, vendors, and laborers against nonpayment.

What is the difference between a bid bond and a performance bond?

Bid bonds are required when contractors bid a project and guarantees if they are low bidder, they will enter into the contract and provide any required performance and payment bonds. Performance bonds guarantee the actual performance of the work to be completed by the contractor according to the terms of the agreement. What happens to a bid bond after a contract is signed? The bid bond is replaced by a performance bond if the bid is accepted and the contractor enters into a contract with the owner or general contractor.

About CSBA
- CSBA Difference
- The Team
Bond Types
Resources
Success Stories
- Testimonials
- Completed Projects
How To Apply
Contact Us

About CSBA
- CSBA Difference
- The Team
Bond Types
Resources
Success Stories
- Testimonials
- Completed Projects
How To Apply
Contact Us

Get a Quote

About CSBA
- CSBA Difference
- The Team
Bond Types
Resources
Success Stories
- Testimonials
- Completed Projects
How to Apply
Contact Us
Get a Quote

March 2020

Virtual Meetings - Commercial Surety - CSBA

What Are You Best At?

Surety Bonds / By admin

I received a year-end financial statement for one of our contractor clients, and the results were truly extraordinary! Not only did they manage to have their biggest revenue year ever, they also had their highest gross profit margin. I asked one of the owners what they would attribute their success to, and I thought his […]

What Are You Best At? Read More »

Southern California
1411 N. Batavia St., Suite 201
Orange, CA 92867
Phone: (714) 627-4587
Fax: (714) 516-9563

Inland Empire
4850 Arlington Ave.
Riverside, CA 92504
Phone: (951) 340-2804
Fax: (951) 343-1219

Northern California
5050 Laguna Blvd., Ste.
112-#804
Elk Grove, CA 95758
Phone: (916) 398-3899

DETAILS
Back to Homepage
Disclaimer
info@commercialsurety.com
CA License No. 0680930

Contact Commercial Surety

We want to know more about how we can help your construction company get the right contractor bond for your next project. Fill out the form below and one of our local expert bonding agents will be in touch with you shortly.

Thanks for contacting CSBA!

Scroll to Top