Construction bonds keep your contract business running smoothly
Contract bond types
There are several types of contract bonds:
- Bid bonds guarantee that a contractor will enter into a contract, if awarded, and furnish such contract bonds as required by the contract terms.
- Performance bonds guarantee faithful performance of the terms of a contract for construction or furnishing of supplies.
- Payment bonds guarantee payment for labor and materials used in the work the contractor is obligated to perform.
- Maintenance bonds guarantee against loss because of defective workmanship or materials used on a construction project.
The bonding process
“Bonding” is what we call the vetting process for contractors seeking a contract surety bond. Before a contract surety bond is issued, the contractor is evaluated and qualified to assure the project owner that the contractor has the resources and capacity to perform the contract according to its terms and conditions.
The financial statements
Many surety companies have stringent financial reporting requirements for contractors, such as requiring contractors to provide CPA-prepared financial statements. In some cases, Nationwide accepts alternate forms of financial statements, such as in-house prepared statements and income tax returns. For new contract bond submissions, we require the three most recent year-end business financial statements and a current year-end personal financial statement for each owner.
The underwriting process
Our unique underwriting approach emphasizes personal and business assets, which means we base our underwriting on the total financial strength of a contractor’s business and its owners. For underwriting, our vetting includes calling a contractor’s banker, suppliers and job references to learn more about their business practices. This background check allows us to provide surety credit without strict reporting requirements.
Please have your account or policy number handy if you are signing up for an On-Line Nationwide Account.
Lazor Insurance and Financial Services
404 North Court Street
Medina, Ohio 44256
(330) 722-4444 Phone
(330) 722-6161 Fax
Securities offered through Brokers International Financial Services, LLC. Member SIPC. Investment advisory services offered through LexAurum Advisors, LLC, a registered investment advisor. Brokers International Financial Services, LLC and LexAurum Advisors, LLC and Lazor Insurance & Financial Services are not affiliated companies.
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