- You are here:
-
Home
-
Business Insurance
-
General Business Insurance
- Surety & Bond Insurance
Surety and Bond Insurance
Contract and Commercial surety bonds may be required for individuals, businesses and organizations, whether you are a project manager, general contractor, supplier or manufacturer we will review all your insurance needs and ensure you have the surety and bond in place that is right for you and needed for your contract, project or business.
We take the time to understand you and your business.
We take the time to understand you and your business.
Contract Bond Overview
The following are the principle and more usual types of bonds utilized in the construction industry.
Bid Bond
A bid bond guarantees that the Principal (the bidder), if awarded the contract within the time stipulated, will enter into a formal contact with the Obligee and furnish the prescribed Performance and Payment Bond(s). Default will ordinarily result in liability for the difference between the amount of the Principal's bid and that of the next lower bidder who can qualify for the contract, subject to the Bid Bond penalty.
Agreement to Bond - Consent of Surety - Bid Letter
This is a letter or an undertaking signed by a Surety Company under which the Surety agrees to furnish a Performance Bond and, if required, a Labour and Material Payment and/or Maintenance Bond on behalf of the bidder, if his tender is accepted.
Performance Bond
A Performance Bond guarantees the Principal's obligation to faithfully perform the terms and conditions of the written contract documents, including any maintenance obligation.
In certain circumstances, the Performance Bond extends to the Principal's obligation to design and build the project. Such bonds are referred to as Design/Build Performance Bonds.
Labour and Material Payment Bond
A Labour and Material Payment Bond Standard Form guarantees the Principal's obligation to pay for labour and material used in the prosecution of the work supplied by those having a direct contract with the Principal.
In certain circumstances the Labour and Material Payment Bond extends to those suppliers of labour and material not having a direct contract with the Principal. This extension is the Broad Form.
Supply Contract Bond
A Supply Contract Bond guarantees the Principal's obligation to perform the contract. These guidelines apply to the furnishing but not installation of supplies of all kinds. Where installation or erection is part of the contract, the bond is classified as a Construction Contract.
Maintenance Bond
A Maintenance Bond guarantees the Principal's obligation to remedy "defective workmanship or materials". However, Maintenance Bonds sometime incorporate an obligation guaranteeing "efficient or successful operation" or other obligations of like intent and purpose.
Completion Bond
A Completion Bond, unlike a Performance Bond, guarantees, in addition to the performance obligation, the successful financing of a construction project. Such a bond is given, either directly or by assignment:
- by an Owner as principal to lenders, lessors, mortgagees, trustees, municipalities or others.
- by a contractor to an owner.
- by a contractor to an owner and lenders, lessors. mortgagees, trustees, or others by assignment or otherwise.
Advance Payment
An advance payment is a payment made to the contractor by the owner prior to being earned. Such advance payments maybe made in a single lump sum prior to commencement of the work or in a series of payments as work progresses.
Release of Hold Back
This instrument guarantees the Principal's obligation to indemnify the Obligee against any loss or damage as a result of any liens arising out of said contract, in a situation where the Obligee has released monies retained by them in accordance with the terms of the contract.
Visit our section on Construction Insurance for more information.
Call us to discuss your business and we can determine the best risk management package for you. We will get you the protection you need at a competitive rate. To learn more or get a free quote contact us 905-696-9090 or Toll Free 1-800-900-2009 or better@hubbardinsurance.com.
Insurance Industry Coverage to Consider
GENERAL BUSINESS INSURANCE
Protect your business property and assets as well as your reputation from lawsuits, accidents and more.
CONSTRUCTION OR CONTRACTOR INSURANCE
Call us before you dig! We have the experience with Builders Risk & Professional Liability Coverage and Contractor Bonding.
GROUP BENEFITS & LIFE INSURANCE
Coverage for health care, dental care, short term or long term disability, life insurance for any size businesses operation.
BUSINESS INSURANCE
Call Toll Free 1-800-900-2009