Michigan Surety Bonds - Compare & Save
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What Is A Surety Bond?
Surety bonds ensure that a contract will be completed in the event that a contractor goes into default. Here is how it works...
A project owner hires a contractor to complete a project and fulfill a work contract. Typically the project owner will require the contractor to purchase a Michigan surety bond. In the event that the contractor defaults, the surety company is then obligated to help find a replacement contractor to complete the job or to compensate the project owner for the financial loss.
Types of Surety Bonds:
Bid Bond: This type of bond provides proof that a contractor bidding on a contract will be able to provide payment and a performance bond if they win the job.
Payment Bond: A payment bond ensures that a contractors suppliers and subcontractors will be paid for work completed under the awarded contract.
Performance Bond: A performance bond ensures that a project will be finished according to the specific terms and conditions outlined in the contract.
Ancillary Bond: Ancillary bonds ensure that requirements crucial to the contract, but not directly performance related, are met.
Who Needs A Surety Bond?
Many projects will require a surety bond to be secured prior to bidding on or performing a contract. All federal construction contracts above $150,000 will require a surety bond. You will also find that the majority of both state and municipal government projects require surety bonds.