surety Bonds - in progress

A contract bond, also known as a contractor or construction bond, is a type of surety bond which guarantees that a job will be completed in accordance with the conditions set forth in the contract for that job.     

Contract bonds are usually obtained by construction contractors to guarantee that if a job is not completed or the contractor defaults, the owner of the project will be compensated. Because they are mostly used in the construction industry, these bonds could also be referred as construction bonds.     

Such bonds are required on all federal projects above $100,000 and on many state projects. Some private projects also require contractors to obtain contract bonds.     

Different bonds are required for the different stages that a construction project goes through. For example, bid bonds are needed at the initial stage when contractors participate in a bid. Bid bonds guarantee that contractors will commence work on the project if they are awarded a bid, and that they will enter at the bid amount. They usually also guarantee that the contractor will post a performance bond when they are awarded the contract.       

Commercial bonds are a group of bonds that is  part of the surety line of business that are comprised of license,  permit, and miscellaneous bonds. These bonds are required by various  municipalities or public authorities to indemnify them and/or the  general public against loss in the event of violation of regulations or  ordinances under which the license or permit is required. 

A contract bond, also known as a  contractor or construction bond, is a type of surety bond which  guarantees that a job will be completed in accordance with the  conditions set forth in the contract for that job.

Contract bonds are usually  obtained by construction contractors to guarantee that if a job is not  completed or the contractor defaults, the owner of the project will be  compensated. Because they are mostly used in the construction industry,  these bonds could also be referred as construction bonds.

Such bonds are required  on all federal projects above $100,000 and on many state projects. Some  private projects also require contractors to obtain contract bonds.

Different bonds are  required for the different stages that a construction project goes  through. For example, bid bonds are needed at the initial stage when  contractors participate in a bid. Bid bonds guarantee that contractors  will commence work on the project if they are awarded a bid, and that  they will enter at the bid amount. They usually also guarantee that the  contractor will post a performance bond when they are awarded the  contract.

xx

Court bonds are a general term for all bonds and undertakings required of participants in a lawsuit permitting them to pursue certain remedies in the courts.

Fidelity Bonds protect an employer from employee theft by guaranteeing the employer’s money and property in the event that an employee causes damage through a negligent or a dishonest action. Often, insurance companies, security firms, and banks are required to obtain fidelity bond coverage.

XX

The cost of a freight broker surety bond is determined based on three factors: 1) the business owner’s personal credit, 2) business experience, and 3) financial strength of the company. Unlike with a Trust Fund Agreement (BMC-85) where full collateral may be required, a Freight Broker Surety Bond (BMC-84) allows freight brokers and forwarders to instead only pay a percentage of the total bond amount, in the form of annual premium, without the need for any collateral.