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Bonds in Construction

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61 views7 pages

Bonds in Construction

Uploaded by

aashik.esn
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Ter We Dat ty Principle Contractor or construction company Surety Obligee Insurance company | Project owner, often that backs the bond @ government agency WHATISA ©) em LBs Surety bonds play a vital role in the construction industry. They guarantee that contractors perform on jobs in compliance with contractual conditions and legal requirements. They protect project owners, other contractors, and the public by playing the role of a financial security mechanism. Construction bonds are legally binding Elec R al hid ah 4b TRAIN Project owners Contractors Surety Company Pd PS Cr the bond obligee the bond principal issues and backs the bond TYPES OF BRYANT SURETY Depending on the type and scope of the project, different surety bonds can be required of contractors. Bid bond 0 Performance bond 0 required for bidding on a contractors must post a contract and guarantees that if performance bond when they awarded, the contractor will ‘execute the job at the bid they have submitted. are awarded a project to secure they will perform according to the conditions of the contract Payment bond 0 serves as a guarantee that the contractor will pay all subcontractors, laborers, Maintenance bond 0 provides security to project ‘owners that there will be no defects or faults in a structure similar to the performance bond but is typically required for projects ona state level and suppliers for services for a certain amount of time after and materials its completion Public works bond 0 Site improvement bond i guarantees that improvements toa structure will be made in accordance with building codes and standards. WHATISIT ee oe [Ese Construction bonds are equally requested by public obligees and private obligees for performing work on a construction project. ae 2! dada cy Required under the Miller Act Specified in the “Little Determined by the for projects over $150,000 _—Miller Act" for each state project owner Surety Bond vs. Insurance Surety Bond Insurance Protects the project owner Protects the policy owner if the contractor cannot if there are any losses due perform their job duties to an unforeseen incident How Do Surety Bonds Teta ae ee eee A surety bond protects the project owner's finances if a contractor fails to: Pay those who work on the project Comply with building codes Acquire permits and licenses Complete the project What Are the 3 Cs of Surety? Character, Capacity and Capital of Surety Bonds Character What are the contractor's qualities and business morals? Capacity Does the contractor have the resources necessary to complete the job? Capital Is the contractor in good financial standing?

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