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Contract Surety Bonds 

Contract surety bonds provide financial security and construction assurance on building and construction projects. They guarantee to the project owner (obligee) that the contractor (principal) is qualified to perform the work and will pay certain subcontractors, laborers and material suppliers. If the contractor defaults, the surety guarantees that the obligations will be met.  


Contract surety bonds include:              

  • Bid bonds - financial assurance that the bid has been submitted in good faith, and that the contractor intends to enter into the contract at the price bid and provide the required performance and payment bonds.
  • Performance bonds - protect the owner from financial loss should the contractor fail to perform the contract in accordance with its terms and conditions.
  • Payment bonds - guarantee that the contractor will pay certain subcontractors, laborers and material suppliers associated with the project.
  • Maintenance bonds - guarantee against defective workmanship or materials for a specified period.
  • Subdivision bonds - guarantee to a city, county or state that the principal will finance and construct certain improvements such as streets, sidewalks, curbs, gutters, sewers and drainage systems.


Common Sense Underwriting

Merchants' expertise in surety comes from our singular focus on this industry for more than eight decades. We have a deep understanding of underwriting considerations and one thing is clear: no two accounts are alike. We review each case on its own merits and do not use inflexible formulas. We look at the whole picture:

    • Corporate Net Worth
    • Pay Record
    • Personal Net Worth - Character Counts
    • Bank Relationships
    • References

We look beyond the financials and embrace the value of business and personal integrity!