How Do I Get a Supply Surety Bond?

A Supply Surety Bond guarantees that a company will supply materials or goods used for a construction project.

The bond is a legal contract between three parties: the project owner or contractor requiring the bond (the obligee), the supplier (the principal), and the surety company. The bond guarantees that a supplier will faithfully perform all duties set forth in the contract.

A supply bond does not cover labor costs. It only covers the materials that are listed in the contract.

A Supply Surety Bond is also required by federal law for contracted projects over $100,000 and for some public works and state projects. Each contract is unique and has different contract requirements and may or may not require a supply bond.

If the supplier fails to fulfill his obligations as stated in the contract, then the project owner or contractor may submit a claim on the bond to the surety company. If the surety finds that the supplier is at fault, then the surety assumes responsibility and will see that the project owner or contractor is compensated. The supplier is then obligated to reimburse the surety for the claimed amount and legal fees, if any.

Because the surety assumes responsibility if a supplier fails to fulfill his obligations, the surety company wants to make sure the supplier is a low risk before issuing a bond in the first place. Suppliers will need to provide the surety information such as a job cost breakdown, work on hand, and a copy of the supply bond contract. Underwriters analyze the information to determine if the supplier qualifies for the bond, what the premium will be, and if there are any other factors that increase the risk. The underwriter then approves or denies the bond application. If approved, the underwriter determines terms of the approval, which includes the premium to be charged.

Supply Bonds Less Than $250,000

To apply for a Supply Surety Bond between $100K- $250K, please fax these completed forms to 404‑351‑3237 or email to info@SuretyGroup.com:

Supply Bonds Over $250,000

To apply for a Supply Bond over $250K, please fax these completed forms to 404‑351‑3237 or email to info@SuretyGroup.com:

How Much Will This Bond Cost?

The premium that you pay for a Supply Surety Bond will vary based on the contract amount for materials. Contact SuretyGroup.com for a free quote based on your specific situation.

Did You Know?

SuretyGroup.com writes all contract surety bonds in all 50 states, including Payment & Performance Bonds, Maintenance Bonds, and free Bid Bonds.