Contract Surety Bonds
Contract Surety Bonds are bonds that the government or an owner of a construction project may require a contractor to obtain.
These bonds are based on the contract between the parties.
There are three types of contract surety bonds:
Bid bond – Provides protection to a project owner (obligee) in the event a successful bidder will not enter a contract and will not provide the required surety bonds or other security
Performance bond - Provides protection to the obligee if the contractor defaults on its obligations under the bonded contract to perform the work.
Payment bond - Guarantees that the contractor will pay subcontractor, labor and material bills associated with the construction project.