What Is a Bond for Construction?
Contractors, especially those who build large homes, do large remodels, or who go after business contracts are usually required by state or local regulations to put up a construction bond. This acts as an assurance to the owner of the project that the contractor will fulfill the terms of the agreement and complete the project.
When to use bid bond or retention guarantee?
A Retention Guarantee protects the Employer by guaranteeing that the Contractor will carry out all necessary work to correct any structural defects discovered immediately after completion of the project as well as during the maintenance period. A Bid Bond is purchased when a Contractor is bidding on a tendered Contract.
How are performance bonds used in the construction industry?
A construction performance bond, also known as a contract bond, is one of the most common types of surety bonds used in the construction industry. Performance bonds make sure that a contractor fulfills all of their obligations under their contract – and if they fail, the performance bond will ensure there’s…
