Contractors may encounter several types of bonds.
License & Permit Bond
May be required by a city, municipality, county, or licensing authority before a contractor can obtain or maintain a license or permit.
Bid Bond
Provides assurance that a contractor submitting a bid will enter into the contract and provide required performance/payment bonds if awarded the project.
Performance Bond
Guarantees performance of the construction contract according to its terms.
Payment Bond
Provides protection for qualifying subcontractors, laborers, and material suppliers if the contractor fails to pay them.
Maintenance Bond
May guarantee workmanship or maintenance obligations for a specified period after project completion.