Contract, Commercial, & Court Bonds
The Insurance Center of Winchester is highly 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 all commitments will be met.
Contract bonds are generally specific to construction projects and are often required to ensure the hired contractors adhere to the terms. However, contract bonds aren’t just beneficial to the project owners or investors. For contractors, contract bonds help establish your company as reliable and professional—which is 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 can provide performance and payment bonds if needed
- Payment Bond – Assures that the contractor is responsible for paying workers 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. Commercial bonds ensure 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 sectors. The cost of commercial bonds is based on several factors, including risk and financial history.
Fiduciaries, plaintiffs and defendants in court cases may be required 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 – Applies to civil cases
- Fiduciary/Probate Bonds – Applies 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.