What Is a Construction Bond?
Construction bonds, also known as surety bonds play a crucial role in the construction industry because they help ensure that contractors performing jobs are compliant with various contractual conditions and legal requirements. Construction bonds are legally binding agreements between project owners, contractors, and the surety company that issues and backs the bond. Construction bonds function as financial security for project managers by guaranteeing compensation if the contractor violates the conditions of the agreement. Under the Miller Act, construction bonds are required for contractors working on federal projects worth more than $150,000.
Depending on the situation, different types of surety bonds are required for contractors. Common types of construction surety bonds include:
- Bid Bond
- Performance Bond
- Payment Bond
- Maintenance Bond
- Public Works Bond
- Site Improvement Bond
Do you need legal guidance regarding a lien or bond lawsuit? Then please call our law firm today at 281-677-3474 or contact us online to request a case consultation.