- Bid bonds are designed to guarantee that a contractor provides any other required performance bonds. This type of bond also assures the project owner that the contractor will fulfill the contract at the given bid price.
- Also referred to as contract bonds, construction bonds are often considered as a subcategory of performance bonds instead of a specific type of bond. In general, construction bonds protect the project owner in some form by ensuring the fulfillment of a contract.
- Sometimes called warranty bonds, maintenance bonds ensure that the contractor will provide quality materials and workmanship. This type of bond operates for a specified amount of time after a project’s completion, and it protects the owner of a project against defective work.
- A payment bond is used to ensure that all of a contractor’s obligations to suppliers, laborers and subcontractors will be fulfilled in the event that the contractor defaults.
- Performance bonds, which are a type of surety bond, are designed to guarantee that contractors complete a project or fulfill certain obligations. These bonds provide project owners with insurance in various forms against the failure of the contractor to fulfill certain duties. The most common types of performance bonds are supply bonds, site improvement bonds, payment bonds, maintenance bonds, construction bonds and bid bonds.
- A site improvement bond is often required by a government agency to protect public property from any losses associated with a private project. This type of bond guarantees that the developer associated with a particular project will completely restore any public property that is damaged or altered during the project.
- Subdivision bonds may be required by a local government in order to ensure that mandatory public improvements are made to their property. These bonds can be required of any developer, builder, or even a landowner to ensure that they meet the requirements of the local authority.
- This type of bond is used to guarantee that a supplier will provide certain materials or supplies. A supply bond protects the purchaser in a contract from loss in the event that a supplier does not fulfill any contractual obligations.