At Brooks Commercial Insurance Services we specialize in two main types of contractor surety bonds, License Bonds and Contract Bonds. Below are brief examples of different types of bonds.
Contractor License Bonds
Contractor License Bonds are a contract in which a surety company promises to the state that a contractor will not commit any violation of contractor license law that is grounds for disciplinary action against the license. Specifically designed for contractors and builders, contractor license bonds are a type of surety bond that many states require to carry a contractor’s license. Contractor license bonds are designed to protect consumers and employees who are owed money, work or unpaid wages. Contractor license bonds ensure that contractors operate in compliance with local and state laws.
Contractor Payment Bonds
Contractor Payment Bonds are a type of contract bond that guarantees that a contractor will pay suppliers, laborers, and subcontractors for labor and materials. Payment bonds and performance bonds are often issued together as “Performance and Payment Bond” package.
Contractor Performance Bonds
Contractor Performance Bonds are a type of contract bond which guarantees that a contractor will adhere to the terms and conditions of a contract according to contract specifications, terms, and conditions. Upon award of a construction contract, the winning bidder submits a performance bond. Typically performance bonds and payment bonds are issued together, because they are so closely related.
Contractor Bid Bonds
Contractor Bid Bonds are used as security for bids submitted on a contract. Placing security on a bid ensures that the bidder will execute the contract at the bid price, upon award of the bid. If security is not submitted with the bid, the bid is rejected. Additionally, if the winning bidder does not enter into a contract, the security is forfeited.