Surety Bond Education

A Subdivision Bond is a type of contract surety bond.  A Subdivision bond guarantees public improvements will be completed pursuant to the development agreement between a governing municipality and a developer. For example, if a developer wants to take a piece of raw land and break it up into residential lots for homes he or she would engage in an approval process with the governing city of county.   A civil engineer would draw up a site plan including public improvements.  Examples of public improvements are: Storm or sanitary sewer Water main Streets Curb & gutter Fire protection such as […]

What is the difference between a Maintenance Bond and a Performance Bond? A Maintenance Surety Bond provides protection against defects on construction improvements already put in place.  This work has been accepted by the owner as fully completed by required standards and specifications.  And the Maintenance Bond will provide financial guarantee should any defects arise from materials or workmanship.  From a risk standpoint: The primary concern of the work actually getting done has been alleviated.  And the maintenance period could be interpreted as less risky since the work was inspected and accepted by the owner’s engineer. A Maintenance Bond carries […]

A Supply Bond is a type of contract surety bond. Specifically it is used to guarantee a contract for supply of materials.  For example, a construction project may require purchase of components that are high-dollar, specialized, and/or critical to completion of the project.  A Supply bond could help manage the financial risk of not getting your delivery on time or at all. Is a Supply Bond Different Than A Payment & Performance Bond? Unlike a Performance bond, which would include labor exposure and execution of construction, a supply bond guarantees delivery of materials or equipment from point A to point […]

If you're only just learning about surety bonds, you may not be clear as to how they are used. There are many different industries that have a need for surety bonds. At Schmalz & Associates, we understand that surety bonds can be a perplexing topic without the proper guidance. In this article, we'll discuss some of the most common uses of a surety bond. Read more about what surety bonds are used for here.