CONTRACTOR & SURETY BONDS
Contractor bonds for Truckee, Tahoe, Reno & Northern Nevada.
Bid bonds, performance bonds, payment bonds, license and permit bonds can all come into play before a contractor ever starts the work. Donner Pass Insurance Services helps contractors understand what bond is being requested, what information the surety may need, and how the bond fits alongside the contractor’s insurance program.
Bond requirements can come from public agencies, project owners, general contractors, lenders, municipalities and licensing authorities. The right starting point is the exact bond requirement, contract or bid package.
COMMON BOND TYPES
Different bonds solve different contract and licensing requirements.
Bid Bonds
A bid bond can be required with a project bid to support the contractor’s commitment to enter the contract and provide required final bonds if awarded the work.
Performance Bonds
A performance bond supports the contractor’s obligation to perform the bonded contract according to its terms, subject to the bond form and surety conditions.
Payment Bonds
A payment bond can support payment obligations to eligible subcontractors, laborers and material suppliers on a bonded project, subject to the bond terms.
License & Permit Bonds
State, county or municipal authorities may require a bond as part of a contractor license, permit or other regulatory obligation.
Maintenance / Warranty Bonds
Some contracts require a bond covering specified maintenance or correction obligations for a defined period after project completion.
Other Surety Requirements
Subdivision, right-of-way, utility, miscellaneous commercial and other bond requirements vary widely. Send us the bond form or requirement and we can identify the appropriate path.
BONDS ARE DIFFERENT FROM INSURANCE
Surety is a three-party agreement.
Contractor insurance generally protects the insured business against covered losses. A surety bond is different: it involves the contractor or principal, the party requiring the bond, and the surety company. If the surety pays a valid bond claim, the principal may have an obligation to reimburse the surety under the indemnity agreement.
WHAT THE SURETY MAY REVIEW
The bond size and type determine how much underwriting is needed.
For smaller license or permit bonds, the process may be relatively simple. Larger contract bonds can involve contractor experience, credit, financial strength, work history, backlog, project size, contract terms and prior bonding history. The exact requirements vary by surety and bond type.
START WITH THE REQUIREMENT
Send the bid package, contract or bond form if you have it.
The fastest way to understand a bond request is usually to review the actual requirement. If you have a bid invitation, contract, obligee bond form, license notice or permit requirement, send it through the secure upload portal and note the deadline in your Business Coverage Review.
Start a Business Coverage Review Call/Text (530) 606-2626
Bond availability, underwriting, rates, collateral or indemnity requirements vary by surety, bond type, amount, applicant qualifications and contract terms. A bond is not issued until approved and confirmed by the applicable surety.
RELATED CONTRACTOR COVERAGE
Bonding is one piece of the contractor risk picture.
Contract requirements may also call for general liability, workers compensation, commercial auto, umbrella or excess liability, certificates, additional insured status and builders risk depending on the project.