There are many different types of contract bonds, and even though they all share the same basic mechanics, each one works a little differently. In this blog post, we will run down the most common types of contract bonds and show you where to find more information about them all.
A contract bond is basically a way to hold someone accountable when they violate the terms of a contract. When that happens, the other party in the contact may file a claim against the contract surety bond. As long as the claim is true – meaning the party at fault violated the contract as the claim asserts – the surety company that backs the bond pays to settle the claim. Under the terms of the bond agreement, the party that caused the claim by violating the contract has the final financial responsibility for all claims. Therefore, even if they have been unable or unwilling to pay for claims before, they must pay the surety back for any settlement. Contract bonds are a way to hold one party responsible for violating a contract and provide the other party a guaranteed way to seek damages.
Contract bond is a blanket term used to describe many different types of bonds in construction contracts or other industries. Bond seekers commonly need multiple types of contact bonds at once, and need different packages of bonds throughout their career. Common types of contract bonds include:
Anyone required to do so according to the terms of a contract. When a contract requires a bond, the agreement isn’t final until the principal (the party required to get the bond) proves it has met the requirement. Different types of bonds in construction contracts can make or break a deal, so it’s crucial to comply with the bond requirement. As a nationwide surety brokerage issuing all types of contract bonds (including all the types outlined above), we can help you meet your bond requirements fast and in full.
In all cases, applicants must fill out a standard bond application, submit to a credit check, and supply a copy of the bond requirements specified in the contract – plus turn over any additional documentation the surety asks for. The surety will then quote a price for the bond, which the principal needs to pay to activate the bond.
Rely on Viking Bond Service for any and all of your contact bonds. We can quote you a price in just 24 hours, and we are happy to work with bond seekers who have bad credit. Count on us to streamline the bond process and get everyone a competitive rate. Request a quote at your convenience. Or speak to one of our bond experts by calling 1-888-278-7389 or by sending your questions through the contact form on this page.
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