Surety Bonds 101

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Surety Bonds101

• The Basics of Bonding

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What is Surety Bonding?
Obligee
Principal
Surety
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Types of Surety Bonds

• Bid Bond
• Performance Bond
• Payment Bond

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Types of Surety Bonds

• Bid Bond
• Performance Bond
• Payment Bond

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Types of Surety Bonds

• Bid Bond
• Performance Bond
• Payment Bond

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Prequalification
Capacity
Financial Strength
Company History
Organization
Continuation Plans
References
Work In progress
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Surety Company Checklist

• Good character
• Experience matching contract requirements
• Financial strength
• Excellent credit history
• Banking relationship
• Line of credit
• Necessary equipment

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Benefits of Bonds
Financial Security
Construction Assurance
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Functions of Bonds

• No liens
• Smooth transition from construction to permanent
  financing
• Provide support to contractor
• Project completion

Surety Bonds
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Cost of Surety Bonds

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Example Surety Bond Rates

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For More Information

• Surety Information Office
• 1828 L St. NW, Suite 720
• Washington, DC 20036
• 202-686-7463 Fax [phone]
• www.sio.org sio_at_sio.org