Stand Alone Maintenance Bond
Stand Alone Maintenance Bond InformationA maintenance bond (warranty bond) is a contract surety bond that protects the owner of a construction project for a certain period after its completion against defects and faults in the structure. On certain structures, such as those for public or commercial purposes, maintenance bonds are required by local governments, while on private and residential projects they are mostly optional. Maintenance bonds guarantee that once a contractor has completed work on a project, if any faults in workmanship, materials or design should become obvious, the contractor will either fix these or the owners will be compensated for the losses. Maintenance bonds also work as a form of security that the project has been constructed in accordance with local regulations, building codes and standards. Maintenance terms usually vary between 12 and 24 months. Like all surety bonds, a maintenance bond is a three-party agreement. The obligee is the party requesting the bond (the project owner), the principal is the side being bonded (the contractor) and the surety is the company underwriting the bond. In the case of a defect or failure in the structure or breach of regulations, within the span of the maintenance term, the obligee is eligible to raise a claim against the maintenance bond. The surety then has to proceed with remedying the problem or compensating the obligee for its losses.
Three party agreement
Surety Bond Definition: The definition of a surety bond is as follows: A surety bond is a binding agreement between three parties. This agreement sets forth a financial guarantee by one party ( “surety” ) to another party ( “obligee” ) that a third party ( “principal” ) will fulfill required obligations to the obligee, and that state, federal, and local laws and applicable regulations will be adhered to. Let’s examine each of the three parties.Learn more about surety bonds
Bad Credit – Fast Approvals – Lowest Rates Available.
- Credit below 650 and/or have blemishes on credit report.
- Average cost is 5-15% of the bond amount.
- Available for all commercial bonds.
Why does credit matter? Applying for a surety bond is similar to applying for a loan. You are asking a surety company to back you financially. Reviewing credit is the best method for the surety to understand their risk. All sureties review credit as a view only and should have no effect on your credit score. While it is true that bad credit makes it harder to obtain a competitive quote, we are committed to making sure all of our customers have access to the best possible rates. While we can’t guarantee that we can provide a bond for the most extreme bad credit situations, we strive to make sure no stone is unturned! In other words, if you are insurable, we will get it written. Contact us today and let us put together an online quote for you that will exceed your expectations.