According to the Small Business Administration definition, Surety bonds ensure contract completion in the event of contractor default. A project owner (called an obligee) seeks a contractor (called a principal) to fulfill a contract. The contractor obtains a surety bond from a surety company. If the contractor defaults, the surety company is obligated to find another contractor to complete the contract or compensate the project owner for the financial loss incurred.
There are four types of surety bonds:
- Bid Bond: Ensures the bidder on a contract will enter into the contract and furnish the required payment and performance bonds if awarded the contract.
- Payment Bond: Ensures suppliers and subcontractors are paid for work performed under the contract.
- Performance Bond: Ensures the contract will be completed in accordance with the terms and conditions of the contract.
- Ancillary Bond: Ensures requirements integral to the contract, but not directly performance related, are performed.
At MODCO we have contracts with many of the top bonding companies in the country. From Operator P-5 Bonds, to ERISA Bonds, to Performance Bonds and everything in between. We will help guide you through the application process, quickly quote and bind the most the competitive quote options, and review your bonding needs on annual basis upon renewal. Our bonding department is dedicated to providing each of our clients the best possible service and pricing.
Please contact us today for all of your bonding needs!