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
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
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
- Corporate Net Worth
- Pay Record
- Personal Net Worth - Character Counts
- Bank Relationships
We look beyond the financials and embrace the value of business and personal integrity!