Bond Type Guide
Payment Bonds
A payment bond guarantees that a contractor will pay subcontractors, laborers, and material suppliers.
What is a Payment Bond?
A payment bond guarantees that the contractor will pay all subcontractors, laborers, and material suppliers working on the project. It protects these parties when they cannot file a mechanic's lien on public property.
Payment Bond vs Performance Bond
Payment and performance bonds are almost always required together. While the performance bond protects the project owner, the payment bond protects the workers and suppliers. They are typically priced together.
Who Needs a Payment Bond?
Other Bond Types
Bid Bonds
A bid bond guarantees that a contractor will honor their bid and enter into a contract if awarded the project.
Performance Bonds
A performance bond guarantees that a contractor will complete a project according to the terms of the contract.
License & Permit Bonds
License and permit bonds are required by government agencies to obtain or maintain a business license.
Court Bonds
Court bonds are required by courts during legal proceedings, including appeal bonds, guardianship bonds, and fiduciary bonds.
Fidelity Bonds
Fidelity bonds protect businesses against employee dishonesty, theft, and fraud.
Commercial Bonds
Commercial surety bonds encompass a wide range of bonds required for business operations beyond construction.