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In contrast to a contractor’s license bond which covers a contractor’s overall work and services, a construction bond is a bond that guarantees a specific contract or building project. Construction bonds include any kind of contract bonds such as bid bonds, payment bonds, performance bonds, or completion bonds, for that reason the terms construction bond and contract bond are often used interchangeably.
Construction bonds are surety bonds between three parties that help ensure the fulfillment of a contract. The three parties are 1. the principal who performs the work or is in charge of the work getting done (generally the contractor); 2. the obligee who is the receiver of the work performed by the principal (also referred to as the owner of the project); and 3. the surety company that is responsible for ensuring that all work is performed on time and according to the agreement.
By and large, construction bonds are only issued for large construction projects involving vast provisional contracts; most construction bonds are required for government construction projects or other projects utilizing public money. Because a construction bond deals with a lot more money than a contractor’s bond, surety companies generally take much more into consideration than just the contractor’s personal or business credit.
Most construction bond applications will require the following:
For bonds less than $250,000, getting a contract bond is a relatively easy process and less information is required. Visit our contract bonds page for a Fast Track Contract Bond Application.
CSIA is a leading provider of construction bonds and insurance. In addition to construction bonds, CSIA offers contractor’s license bonds. Other insurance needs, such as general liability, workman’s compensation and commercial automobile insurance, can be found through Skyles Insurance Agency.
For construction bond rates and quotes, call us now at 800-675-2000 to speak with a live representative. We will be happy to answer any and all questions you may have.