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Surety Bonds



A surety bond is a promise to pay one party (the obligee) a certain amount if a second party (the principal) fails to meet a specified obligation, such as fulfilling the terms of a contract. The surety bond protects the obligee against losses resulting from the principal’s failure to meet the obligation. There are several types, including:

Performance Bonds– Bonds that assure a contract will be performed according to its terms and specifications. In the event a contractor defaults, these bonds generally obligate the surety to either finance the contractor, undertake the completion of the project, tender a new contractor to the new owner or pay the bond penalty.

Payment Bonds– Bonds that assure a contractor will make appropriate, prompt and full payments for labor and material consumed on a project.

Maintenance Bonds– Bonds that assure a project will remain free of defects in workmanship or materials for a specific period of time.

 
 

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This website provides a basic summary of the insurance products offered by Martin & Zerfoss. It is not a statement of contract and coverage may not apply in all areas. For a complete description of coverage, please read the insurance policy, including all endorsements.

 
 



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