Contract Performance Bond
Simply stated, contract bonds guarantee the performance of a written contract according to its terms and conditions.
Due to the nature of contract surety bonding, contract bonds require extensive underwriting. We recommend contacting Lovett Insurance at least one month before bidding on a contract.
- Bid bond
- Performance bond
- Payment bond
A Bid bond guarantees that if a contractor is the low bidder on a project, he/she will enter into a contract and provide a Performance bond.
A Performance bond guarantees the contract will be completed according to its terms and conditions.
A Payment bond guarantees payment of laborers, subcontractors, and material suppliers.
Example: An electrical contractor may need contract bonds to guarantee the performance of construction contract or to guarantee the supply of goods and materials. Most public works projects required Bid, Performance, and Payment bonds from the contractor. These bonds will guarantee the contractor's performance according to the terms of the contract with the project owner.