Construction Surety Bonds

What Are Construction Surety Bonds?

The construction industry regularly involves large agreements between contractors and their clients, and clients often want reassurance that contractors will uphold their portions of these agreements. Construction surety bonds are one way contractors provide that reassurance.

Construction surety bonds may be more like lines of credit than traditional insurance policies, but a number of insurance companies offer them.

As experts in the bonding arena and with a thorough knowledge of its unique details and requirements, we offer a wide variety of options to guarantee commercial and personal obligations are met.

We offer bonds from $1,000 up to $500 million. With our Contractor's Express Program we can obtain up to $500,000 in bonding for you within a 24 to 48 hour period, with only minimum information required.

What Businesses Need a Construction Surety Bond?

Most businesses in the construction industry can benefit from having a surety bond. This includes (but isn’t limited to):

Tradespeople (e.g. electricians, plumbers, etc.)
Small general contractors and home builders
Contractors dealing with environmentally hazardous materials (e.g. asbestos)
Constructions companies specializing in roadways and utilities

How large a bond these businesses need depends on the scope of their project. All of these businesses, however, work on sizable projects where clients may request a bond as reassurance.

What Types of Surety Bonds Are Available to Construction Businesses?

Because so many construction businesses need surety bonds, insurance companies that offer these bonds frequently provide several different types of specialized ones.

One way to categorize these various bonds is according to the construction businesses that use them. According to this categorization, some of the different kinds of bonds offered are:

General Construction Bonds
Utility Construction Bonds
Road, Site and Paving Bonds
Bridge and Steel Erection Bonds
Environmental Construction Bonds (Asbestos, Site Remediation, Tank Work, Landfill Construction)
Subdivision/Road-Site Completion Construction Bonds
Hard to Place Contract/Construction Bonds
Supply Performance Contract Bonds
Start-Up Contractor Bonds
Sub-Trade Bonds (Electrical, Mechanical, Plumbing & Heating, Painting, Drywall, Flooring, Sprinkler, Roofing, Landscaping, Fencing, Guardrail, etc.)

Another way to categorize bonds is by their role within a construction project. At various phases of a project, a business might need:

Bid Bonds, which serve as a guarantee that the contractor who bids on a project will enter into a contract and purchase the required performance and payment bonds
Performance Bonds, which serve as a guarantee that the contractor who enters into a contract will complete the work as promised and follow all applicable regulations
Payment Bonds, which serve as a guarantee that the contractor who enters into a contract will properly pay any workers they use according to all federal and state laws
Maintenance Bonds, which serve as a guarantee that the contractor who completes a project will compensate the owner for any defects that are found in the contractor’s work

Performance bonds and payment bonds are frequently lumped together as performance and payment bonds.

Do Insurance Agents Help Businesses Find Construction Bonds?

Since it’s insurance companies that offer these bonds, insurance agents do help construction businesses find the surety bonds they need. Not all agents are familiar with bonds, however. Businesses that need these bonds should work with someone who is knowledgeable about them.

An agent who specializes in construction bonds will be of greater help because they likely can:

Help business owners understand how a bond relates to the business’ other aspects
Explain the various parties’ roles within the surety relationship
Review and comment on how reasonable contract terms are
Ensure all necessary documents are available in a timely fashion
Recommend attorneys, accountants, other contractors and lenders as needed

Additionally, businesses generally have the most success finding a bond if they work with an independent insurance agent. An agent who isn’t limited to just one companies’ bond offerings will be able to compare the terms, conditions and rates of various insurers’ offerings to help business owners find the best one that meets their project’s needs.

How Can Businesses Get Construction Surety Bonds?

For help finding a bond for your construction business, contact the specialized and independent insurance agents at World Insurance Associates. Our agents have helped many other businesses find construction surety bonds, and we have the expertise needed to help your business.

Meet Your Industry Specialist

Jeffrey P. Deldin, CPCU, AFSB

Mr. Deldin is a Partner of World Insurance Associates LLC and the former President of Bruen Deldin DiDio Associates, Inc. based in Brewster, NY. Jeff works with clients in the New England and Mid-Atlantic territory. He began his surety career in 1990 and became a surety bond broker and construction insurance broker in 1995.

Mr. Deldin works on clients' bonding and insurance needs with a focus on the construction industry. He has experience with all lines of construction, including: general contractors, heavy & highway, subcontractors, specialty trades, and environmental risks.

Jeff received his B.S. in Business Finance from the University of Connecticut. He sits on various agency council boards with key insurance carriers. He is involved with local, regional, and national construction trade organizations as well as insurance and bond associations. In addition, the company has been a member of The Associated Builders & Contractors - CT Chapter since 1998. Jeff has also served as a member of the ABC-CT Board of Directors for 12 years.

I would like to thank you, your entire office staff at World Insurance Associates, and the outside team of insurance groups, from bonding to personal and commercial insurance, for your knowledge and expertise in the insurance industry.

The support you have given to me and my company throughout the past ten years, from professional advice and you're keeping up with changes to our insurance needs, has been greatly appreciated.

Your excellent staff support and sales team have truly made us feel protected against all liabilities. Since our company has consistently grown with each passing year, we have become more aware of the ever growing need to be insured properly.

Vincenzo Capasso, Frank Capasso & Sons, Inc.

I would like to take this opportunity to express our appreciation for your company's outstanding customer service. Your staff always exhibits a high degree of professionalism and they have an excellent work ethic. They are quick to respond to requests and to provide answers whenever needed.

From our first meeting, you clearly demonstrated your dedication to making our insurance and bonding needs simple. Our confidence in your ability has allowed us to focus our attention on the other day to day aspects of our business.

It is a pleasure to work with a firm that makes our business success a priority.

We would gladly recommend your firm to anyone asking for references.

William T. Dubray, President, WD Excavation & Contracting, Inc.

Excellent service and always helpful! I have used and continue to use World Insurance for all my insurance needs. They are customer oriented and always there to service you whenever you have a question or just need direction. Pricing is very competitive. Highly recommended!

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Donna Pattani, Philadelphia PA

This material is for informational purposes only. All statements herein are subject to the provisions, exclusions and conditions of the applicable policy, state and federal laws. For an actual description of coverage, terms and conditions, please refer to the applicable insurance policy or check with your insurance professional. The illustrations, instructions and principles contained in the material are general in scope and, to the best of our knowledge, current at the time of publication.

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What Are Construction Surety Bonds?

What Businesses Need a Construction Surety Bond?

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What Types of Surety Bonds Are Available to Construction Businesses?

Do Insurance Agents Help Businesses Find Construction Bonds?

How Can Businesses Get Construction Surety Bonds?

Meet Your Industry Specialist

Jeffrey P. Deldin, CPCU, AFSB

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