Surety Bonds for Contractors of Heavy Construction Projects
The construction industry categorizes the types of construction project a contractor works on. Specialty construction areas that are not categorized elsewhere fit in a miscellaneous heavy construction industry. This is not typically constructing buildings, but instead constructing infrastructure projects in transportation, power-related construction, sewage and wastewater treatment, plus other water projects such as building reservoirs and dams.
Heavy construction projects are often completed by small to medium size companies that specialize in a specific trade. The miscellaneous category covers a wide array of construction projects such as athletic fields, furnace construction, brush clearing, golf courses, missile facilities, nuclear reactors, oil refineries, pond construction, railroad construction, and waste disposal plants.
While licensing requirements for general contractors and special trade contractors vary according to the state, a heavy construction project will usually require that the contractor obtain a Payment and Performance surety bond.
Obligee and Surety Bond Requirement
There are three parties to a surety bond contract: an obligee, a principal, and a surety. An "obligee" is the entity requiring a surety bond. The obligee for most heavy construction projects will be a federal government, state government, city, or municipality. The "principal" is the contractor who is required to obtain a surety bond. And the "surety" is the company that issues the bond.
A surety bond is a guarantee from the contractor to the project owner that the project will be completed as agreed to in the contract. Some contractual obligations can include a completion date, a budget, details of the work to be performed, and specifics on the quality of work.
If the contractor fails to follow through on the contract, the obligee can make a claim on the surety bond.
What Does a Payment & Performance Bond Cost?
The premium that a contractor pays for a payment and performance bond depends on several factors, such as the project size and the contractor's personal and business financials. Contact SuretyGroup.com for a free quote based on your specific project.Did You Know?
SuretyGroup.com offers free bid bonds for qualifying contractors.Related Links:
Infrastructure Contractor Surety BondsFree Bid Bonds for Qualifying Contractors
Heavy Civil Engineering Construction Contractor Surety Bonds
Commercial Building General Contract Bond
More Surety Bond Questions?
Check out our FAQ page or What’s a Surety Bond? page. Should you need or choose to buy a surety bond, buy from us. SuretyGroup.com has been underwriting surety bonds throughout the U.S. for more than 35 years. When you work with us, you enjoy the unique benefit of dealing with a team of highly experienced surety agents with in-house underwriting authority. This allows you to receive competitive, low rates, quick approvals, and immediate bond delivery. In most cases, your bond will be delivered within 24 hours after you apply for it.
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