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Bid Bond
This bond guarantees that, if awarded a contract within the stipulated
time, a contractor will uphold his/her offer, will sign the
contract and will provide all final bonds (performance and
payment bonds). Usually, this bond is equivalent to 5% or 10%
of the bid amount. Performance Bond
This bond provides the obligee (owner) with a guarantee
that the contractor will fulfill his/her duties
according to the terms
stipulated in the contract (price, time and specifications).
Usually, this bond is equivalent to 100% of the contracted
price.
Premiums are determined according to the type of work and
based on the contract price. This bond is usually
issued with the
Payment Bond, which is why it’s known as a “Performance
and Payment Bond.” Payment Bond
This bond guarantees payment to certain subcontractors, workers
and materials suppliers used in the project. Usually, this bond
is equivalent to 100% of the contract price. We do not charge
a premium for the Payment Bond when it is issued jointly with
the Performance Bond. Supply Bond
This bond guarantees delivery of supplies according to the terms
stated in the contract or the purchase order. Usually, this bond
is equivalent to a 20% to 30% of the contract price or the purchase
order price.
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