A bond, in short, is a guarantee that agreed upon work will get completed according to certain terms and conditions, otherwise financial retribution will be made. Bonds can be seen as contracts of sorts. Contractors often use bonds to ensure projects are completed on time. But a bond can be used for a variety of circumstances.
There are several types of bonds. Here are just a few:
- Contract Bonds – Provide financial security and construction assurance on building and construction projects by assuring the project owner (obligee) that the contractor (principal) will perform the work and pay certain subcontractors, laborers, and material suppliers.
- Maintenance Bonds – Provide for upkeep of the project for a specified period of time after a project is completed. These bonds protect against defective workmanship or materials.
- Payment Bonds – Cover payment of the contractor’s obligation under the contract for subcontractors, laborers, and materials suppliers associated with the project. Payment bonds may be the only protection for those supplying labor or materials to a public job.
- Performance Bonds – Cover performance of the terms of a contract. In other words, it protects the owner from financial loss should a contractor fail to perform the contract in accordance with its terms and conditions.
- Surety Bonds -Three-party agreements that protect an obligee against loss.
For more information about how bonds can protect your South Carolina business, contact the expert agents at Schirmer Insurance Group, LLC at 843-881-4707 or fill out our online form for a free quote today!