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Maintenance Bond Information
A maintenance bond ensures that once a construction project is complete that maintenance will be assured on the project for a specified length of time. This length of time is determined before the project is complete, typically a year, and is guaranteed even if the original construction company is no longer available to complete the required maintenance. Should there be issues with the materials, any design flaws or shoddy workmanship; maintenance bonds will cover the repairs similar to, though not exactly like insurance.
Depending on if the project is public or private; a maintenance bond may or may not be required. A federal or government project usually requires a maintenance bond or those used for commercial uses. However those used for private or residential uses have the option not to use maintenance bonds if the project owner so chooses not to. Although it would save money on a project not to use a maintenance bond, the project owner would not be protected if, once the construction is complete, a fault were discovered, such as the building were not up to code, which is just one such issue that a maintenance bond would protect against.
For a new contractor attempting to secure a maintenance bond for a new project, a few things may be requested by the surety company. Those things may include, but not be limited to, business financial statements, personal financial statements for all business owners, a bank reference letter, copies of all insurance papers and a copy of all contractors’ licenses. However, this does not always ensure that the company will grant a maintenance bond to the contractor.