What types of construction surety bonds are available to construction businesses?
Due to the diverse needs of construction businesses, insurance companies that offer construction surety bonds often provide several specialized types of these bonds.
One way to categorize these bonds is by the construction businesses that use them. Some of the different kinds of bonds offered include:
- General Contractor Surety Bonds
- Start-Up Contractor Bonds
- Subdivision Bonds
- Paving, Road and Site Bonds
- Steel Construction and Bridge Bonds
- Utility Work Bonds
- Environmental Surety Bonds
- Supply Performance Surety Bonds
- Sub-Trade Surety Bonds
Another way to classify bonds is by their role within a construction project. At various phases of a project, a business might need:
- Bid Bonds: May guarantee that a contractor bidding on a project will enter into a contract and purchase the required performance and payment surety bonds.
- Performance Surety Bonds: May guarantee that a contractor entering into a contract will complete the work as promised and follow all applicable regulations.
- Payment Surety Bonds: May guarantee that a contractor entering into a contract will properly pay workers according to all federal and state laws.
- Maintenance Surety Bonds: May guarantee that a contractor completing a project will compensate the owner for any defects found in the contractor's work.
Often, performance bonds and payment bonds are grouped together.
Do insurance agents assist construction companies in finding bonds?
Since insurance companies offer construction surety bonds, insurance agents can help construction businesses find the bonds they need. However, not all agents are familiar with these bonds. Businesses that need these bonds should work with someone who's specifically knowledgeable about bonds for this industry.
An agent who specializes in construction surety bonds will be more helpful because they can likely:
- Explain how a bond relates to the business's other aspects
- Define the role of each party involved with the bond
- Review and comment on the reasonableness of contract terms
- Make sure all required documents are available in a timely manner
- Recommend accountants, attorneys, accountants, contractors and lenders
How can Massachusetts businesses obtain construction bonds?
For assistance in finding a construction bond for your business, contact the specialized and independent insurance agents at Norwood Insurance Agency. Our agents have helped many other businesses find construction bonds, and we have the expertise needed to help your Massachusetts construction company.
