In America, it’s a requirement that all construction projects have some surety bond. These bonds provide assurance to investors that the contractors will complete the construction work as proposed. In most cases, the bonds will involve three parties, namely the surety, contractor, and the project owner/investor. Depending on your project, the following are the main types of construction bonds in Burlington Vermont, that you need to be aware of.
1. Bid Bonds
As the name suggests, a bid bond gives the investor the assurance that whoever wins the construction bid will adhere fully to the stated requirements. In other words, if the bidder wins the project and fails to deliver as per the terms and conditions, then they will have to compensate the project owner.
2. Performance Bonds
A performance bond, also known as contract bonds, is a type of bond that assures the project owner/investor of successful completion of the project. As such, if the project executor fails to meet any obligations specified in the contract, they will be held liable.
3. Payment Bonds
Payment bonds are surety bought by contractors to give a guarantee that all the subcontractors, suppliers, and any other party involved in the construction project will receive their payments appropriately. As such, if anyone isn’t paid, then he or she can file a claim with the surety.
Construction projects are expensive yet risky businesses. Therefore, there is no investor that’s willing to gamble with such projects. In order to get the work done, you should consider signing the above-mentioned construction bonds in Burlington Vermont. Also, you can contact Hickok & Boardman Insurance or visit our sites at
https://hbinsurance.com for exceptional insurance services in Vermont.
