This info-graphic entitled Contractor Surety Bonds — All You Need to Know provides us an overview of contract surety bonds. A contract surety, also called as a contractor bond, is a type of surety bond which assures that a job will be accomplished in accordance with the conditions set forth in the contract for that job. Contract bonds are usually acquired by construction contractors to guarantee that if a job is not accomplished or the contractor defaults, the owner of the project shall be compensated. Because they are mostly used in the commercial enterprise industry, these bonds could also be known as construction surety bonds.
Such bonds are obligatory on all federal projects above $100,000 and on many projects of authorities. Some private projects also necessitate contractors to obtain contract bonds. Bid bonds are needed at the first stage when contractors participate in a bid. These assure that contractors will commence work on the project if they are awarded a bid, and that they will enter into the project at the bid amount. They usually also guarantee that the contractor will post a performance bond when they are allocated the contract. For more information, please refer to the info graphic below.
