CONTRACT BONDS
Surety bonds used in construction are called contract bonds. There are three main types of contract bonds:
Bid Bond - Guarantees that the contractor will enter into the contract at the determined price.
Performance Bond - Guarantees the performance of the work on schedule and according to the plans and specifications.
Payment Bond - Guarantees that certain workers, subcontractors and suppliers will be paid.
PLEASE NOTE: If you are an infrequent user of bonds and your contracts that require bonding are under $250,000 we have several Specialty Bond Programs that may accomodate your bonding needs.
Before approving a contract bond, the surety underwriter will analyze the contractor’s capital, character and capacity to determine that the contractor can perform the work. This involves a thorough analysis of financial statements, work on hand schedules and accounts receivable/payable as well as a review of bank lines of credit, reference letters and company history. In order to establish a contract bonding account for a contractor, we need the following information:
Contractor’s Questionnaire (download)
Company Financial Statements:
Submit the last three (3) year-end statements on the entity to be bonded.
Submit the most current interim statement. (Must be within 90 days)
Personal Financial Statement for Each Owner (download)
Current Schedule of Accounts Receivable and Payable
Include a note on each item over 90 days detailing what it is and the anticipated date of collection.
Credit Authorization Form (download)
Bank Reference Letter (download)
Submit a letter from your bank outlining:
1. Average balances
2. Exact terms of existing loans
3. Line of credit
4. How much money is available for future working capital needsCurrent Certificate of Insurance
Current Work in Progress Schedule (download)
Please make sure each column is completed
Resumes for Owner(s) and Key Personnel