{"id":46,"date":"2016-09-16T21:59:29","date_gmt":"2016-09-16T21:59:29","guid":{"rendered":"http:\/\/www.performancesuretybonds.com\/blog\/?p=46"},"modified":"2022-01-24T16:04:50","modified_gmt":"2022-01-24T16:04:50","slug":"surety-bonds-work-construction-infographic","status":"publish","type":"post","link":"https:\/\/www.performancesuretybonds.com\/blog\/surety-bonds-work-construction-infographic\/","title":{"rendered":"How Surety Bonds Work In Construction &#8211; Infographic"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-47 aligncenter\" src=\"https:\/\/www.performancesuretybonds.com\/blog\/wp-content\/uploads\/2016\/09\/Updated_VBS_infographic-299x1024.png\" alt=\"Updated_VBS_infographic\" width=\"500\" height=\"1713\" srcset=\"https:\/\/www.performancesuretybonds.com\/blog\/wp-content\/uploads\/2016\/09\/Updated_VBS_infographic-299x1024.png 299w, https:\/\/www.performancesuretybonds.com\/blog\/wp-content\/uploads\/2016\/09\/Updated_VBS_infographic-88x300.png 88w, https:\/\/www.performancesuretybonds.com\/blog\/wp-content\/uploads\/2016\/09\/Updated_VBS_infographic-768x2630.png 768w, https:\/\/www.performancesuretybonds.com\/blog\/wp-content\/uploads\/2016\/09\/Updated_VBS_infographic-1200x4110.png 1200w, https:\/\/www.performancesuretybonds.com\/blog\/wp-content\/uploads\/2016\/09\/Updated_VBS_infographic.png 2000w\" sizes=\"auto, (max-width: 500px) 85vw, 500px\" \/><\/p>\n<p><!--more--><\/p>\n<h3>Share this Image On Your Site<\/h3>\n<p><textarea style=\"width: 540px; height: 100px;\">&lt;p&gt;&lt;strong&gt;Please include attribution to https:\/\/www.performancesuretybonds.com\/ with this graphic.&lt;\/strong&gt;&lt;\/p&gt;&lt;br \/&gt;&lt;br \/&gt;<br \/>\n&lt;p&gt;&lt;a href=&#8217;https:\/\/www.performancesuretybonds.com\/blog\/surety-bonds-work-construction-infographic\/&#8217;&gt;&lt;img src=&#8217;https:\/\/www.performancesuretybonds.com\/blog\/wp-content\/uploads\/2016\/09\/Updated_VBS_infographic-299&#215;1024.png&#8217; alt=&#8217;How Surety Bonds Work In Construction &#8216; width=&#8217;500&#8242; border=&#8217;0&#8217; \/&gt;&lt;\/a&gt;&lt;\/p&gt;&lt;br \/&gt;&lt;br \/&gt;<br \/>\n&lt;p&gt;<\/textarea><\/p>\n<h1><span style=\"color: #333399;\">How Surety Bonds Work in Construction<\/span><\/h1>\n<p>For construction projects, <a href=\"https:\/\/www.performancesuretybonds.com\/surety-bond\/what-is-a-surety-bond\/\">surety bonds<\/a> are often required by municipal agencies and instill confidence in your company. Let\u2019s take a closer look at how they work.<\/p>\n<h2><span style=\"color: #333399;\">What is a Surety Bond?<\/span><\/h2>\n<p>Surety bonds involve three parties:<\/p>\n<ul>\n<li>The principal (the construction company\/contractor)<\/li>\n<li>The obligee (the municipal agency)<\/li>\n<li>The surety company<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"color: #333399;\"><strong>How it works:<\/strong><\/span><\/p>\n<p>1. The principal promises to perform their work as contracted by the obligee.<\/p>\n<p>2. If a construction company fails to meet their contractual obligation for a project, the public or the government agency can file a claim to the surety company.<\/p>\n<p>3. The surety company settles the claim with a financial sum or assigns a new contractor to take over the project.<\/p>\n<p>4. The original contractor is responsible for the amount paid on the claim.<\/p>\n<h2><span style=\"color: #333399;\">Types of Construction Surety Bonds<\/span><\/h2>\n<p><strong><a href=\"https:\/\/www.performancesuretybonds.com\/contract\/bid-bonds\/\">Bid bond<\/a><\/strong><\/p>\n<ul>\n<li>Necessary for the bidding process<\/li>\n<li>Protects obligee if contractor is awarded bid but fails to sign contract or provide required bonds<\/li>\n<li>Weeds out unqualified construction project bidders<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><strong><a href=\"https:\/\/www.performancesuretybonds.com\/contract\/payment-bonds\/\">Payment bond<\/a><\/strong><\/p>\n<ul>\n<li>Ensures workers, subcontractors, and material suppliers receive payment from contractor<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><strong><a href=\"https:\/\/www.performancesuretybonds.com\/contract\/performance-bonds\/\">Performance bond<\/a><\/strong><\/p>\n<ul>\n<li>Protects taxpayers from financial loss should contractor fail to perform duties in accordance with contract terms and conditions<\/li>\n<\/ul>\n<h2><span style=\"color: #333399;\">Why a Surety Bond is required?<\/span><\/h2>\n<ul>\n<li>Protect the general public<\/li>\n<li>Ensure project completion<\/li>\n<li>Ensure payment for all workers and subcontractors<\/li>\n<li>Create easy transition from financing construction to permanent financing<\/li>\n<li>Allow for prequalification of contractors<\/li>\n<\/ul>\n<h2><span style=\"color: #333399;\">What You Need to Apply for a Construction Surety Bond<\/span><\/h2>\n<ul>\n<li>Contract bond application<\/li>\n<li>Copy of contract (portion that pertains to the insurance and bonding requirements)<\/li>\n<li>Bond form<\/li>\n<li>Financial statements<br \/>\n*Larger contracts require more documentation<\/li>\n<\/ul>\n<p>To learn more or to apply for a <a href=\"https:\/\/www.performancesuretybonds.com\/contract\/construction-bond\/\">construction surety bond<\/a> today, visit <a href=\"https:\/\/www.performancesuretybonds.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">PerformanceSuretyBonds.com<\/a><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"class_list":["post-46","post","type-post","status-publish","format-standard","hentry","category-infographic"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How Surety Bonds Work In Construction [infographic]<\/title>\n<meta name=\"description\" content=\"For construction projects, surety bonds are often required by municipal agencies and instill confidence in your company.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.performancesuretybonds.com\/blog\/surety-bonds-work-construction-infographic\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How Surety Bonds Work In Construction [infographic]\" \/>\n<meta property=\"og:description\" content=\"For construction projects, surety bonds are often required by municipal agencies and instill confidence in your company.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.performancesuretybonds.com\/blog\/surety-bonds-work-construction-infographic\/\" \/>\n<meta property=\"og:site_name\" content=\"Surety Bond Blog | Discover Performance Bonds, Court Bonds &amp; 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