Customer sample slideshare

1. CONTRACT
BONDING

2. Today many construction projects require a bond which falls under the
category of Contract Bonds. These bonds include:
· Bid Bonds
· Payment and Performance Bonds
· Warranty or Maintenance Bonds
They are used to guarantee that the contractors work will be done
according to the contract.
To obtain a bond a contractor is required to sign an Indemnity Agreement
with the Bond Company, if there is a claim on the bond the bond company
pay the bills and then seek to be reimbursed (or indemnied) by the
contractor for the claim expenses.

3. PERFORMANCE BOND
This bond guarantees that the contractor
completes the project according to the
contract. If they fail to do so the project
owner can make a claim on the bond.

4. PAYMENT BOND
The type of bond guarantees the proper
payment for services in relation to the
contract. The bond amount can be used
to reimburse suppliers, subcontractors or
others who worked on the project.
Usually Payment and Performance bonds
are issued together.

5. BID BOND
This type of bonds are used when bidding
on a project, they help make sure the
contractors is serious about their bid and
it reassures the project owner that the
bidders have the financial credentials
necessary for the job. Most bid bonds are
at a % of the contract price, usually 5%,
but occasionally 10 or 20%. If the winning
bidder declines the job or retracts the bid
the project owner can make a claim on
the bond to recoup the difference between
that bid and then next highest.

6. MAINTENANCE
or
WARRANTY BOND
This bonds guarantee work performed. A
Maintenance bond guarantees against
defective materials and workmanship for a
specific time period. If the project is found
to be defective during the time period the
bond can be used to pay for the repairs.

7. ENCROACHMENT
BOND
This type of bond us required by city,
county or state when a contractors
performs work on private property that
might spread onto public property. The
bond guarantees that the results of the
work will not materially alter the condition
of the adjacent public property.

8. CONTRACTORS
LICENSE BOND
A Contractors license bond is sometimes
required by the state in order to be a
licensed contractor in that state. Some
states require all contractors to obtain a
license bond and others only require a
bond if the contractor does not meet their
qualifications.

9. OBTAINING A BOND
In order to get a contract bond we need to set up a bond line.
The requirements vary depending on the size of the bond
needed. See the table on the next slide for more details.
Sometimes the requirements may vary depending on a specific
job but this will give you an idea of what you need to get started.

10. Under
$250,000
· Bond Application
· Good Credit Score
· Minimum 1 year
experience.
$250,000 -
$500,000
· Bond Application
· Personal and/or Business
Financial Statement
$500,000 -
$1,000,000
· Bond Application
· Personal Financial
Statement
· CPA Prepared Business
Financial Statement
Over
$1,000,000
· Bond Application
· Personal Financial
Statement
· 3 years of CPA Reviewed
Business Financial
Statement
· Bank Line of Credit
Information
· Work in Progress
Resumes on Owners

11. Visit our website for more information and to print documents to get
started on your bond line.
http://www.certiedinsurance.net/services/construction-bonds/