The Insurance Center of Winchester is very experienced in helping business owners obtain the bonds necessary to fulfill legal and contractual obligations. Bonds are a method of risk transfer, providing assurances that contractual obligations will be met.
Contract bonds are generally specific to construction projects and are often required by project owners or investors to ensure contractors adhere to contract terms. However, contract bonds aren’t just beneficial to project owners. For contractors, contract bonds help establish your company as reliable and professional—and that can be great for your reputation.
There are four main types of contract bonds:
- Bid bond – Assures that the contractor will fulfill the responsibilities associated with the bid and that the contractor can provide performance and payment bonds if needed.
- Payment bond – Assures that the contractor is responsible for paying contractors and buying supplies.
- Maintenance bond – Assures that the contractor is responsible for maintaining facility repairs for a set amount of time following the completion of the project.
- Performance bond – Protects the project owner from financial loss if the contractor fails to fulfill contractual terms.
While contract bonds protect investors and project owners, commercial bonds protect consumers by ensuring that businesses adhere to appropriate consumer protection laws. Also known as no-contract surety bonds, there are many different types of commercial bonds that depend on industry and business sector. The cost of commercial bonds is based on a variety of factors, including risk and financial history.
Fiduciaries, plaintiffs and defendants in court cases may be required by the court to carry a court bond. These types of bonds protect the court against possible losses due to the outcome of a case. There are two main types of court bonds:
- Judicial bonds – Apply to civil cases
- Fiduciary/probate bonds – Apply to court-appointed executors or trustees of a will
Contact the Insurance Center of Winchester to discuss the type of bond you need by calling 540-667-0700.