Two different promises
A performance bond generally backs the contractor’s performance of the bonded contract. A payment bond generally addresses payment obligations to eligible subcontractors and suppliers. The bond wording and law determine the obligation.
Prepare before the deadline
Send the contract, required bond forms, project value, scope, location and bid or execution deadline. A surety may also request financial statements, work history and a schedule of current jobs.
A bond is not ordinary liability insurance
Surety underwriting evaluates your ability to perform the obligation. Indemnity agreements may require repayment to the surety after a loss. Capacity, approval and issuance are subject to underwriting; they are not guaranteed.
Contractor surety: from the first bid to final bonds
Liberty Union Insurance Group, Inc. helps contractors bring together the forms, project facts and financial information needed for a surety review. Performance and payment obligations deserve separate attention.
Claims Example: when the job stops
A contractor runs short of cash while subcontractors remain unpaid. What could the performance and payment bonds address—and what could the contractor still owe? Read the illustrative bond loss story ↗