How the Cost of a Contract Bond Is Determined

Nina Conner News

Posted by Todd Taylor, AFSB, CPCU, for OldRepublicSurety

What goes into determining the cost of a contract bond? Here is a basic introduction.

Common Contract Bonds

These are some of the most common contract bonds:

  • Bid bond—surety consents to provide performance and payment bonds, if the contract is awarded
  • Performance bond—guarantees performance according to contract, bond terms
  • Payment bond—guarantees payment according to contract, bond terms
  • Maintenance bond—guarantees against defects in materials or workmanship for a stated period after completion
  • Site or completion bond—guarantees of completion involving contractor financing

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