How do different types of construction bonds affect your ability to get paid? Learn more about the 3 main types of construction bonds today.
00:00 - Intro
00:23 - Bid Bonds
00:57 - Performance Bonds
01:42 - Payment Bonds
#ConstructionBonds #ConstructionIndustry #BidBonds
Read full blog posts here:
Overview of Construction Bid Bonds: lvl.st/bid-bonds
Construction Performance Bonds: lvl.st/performance-bonds
Payment Bonds: lvl.st/payment-bonds
Other types of construction bonds: lvl.st/construction-bonds
Still have questions? Get them answered for free by attorneys and experts: lvl.st/get-free-help-bond-claim
Related videos:
How to make a payment bond claim: • How to Make a Payment ...
What is a payment bond: • What is a construction...
-What are bid bonds?
Bid bonds are generally required from every general contractor bidding on a public project. These are meant to protect the contracting entity against any frivolous or low-ball construction bids.
Before bidding on a public works project, you’ll need to secure a bid bond. This bond guarantees that if the bid is selected, the contractor accepts the job and will perform it for the price bid. So, if you don’t go through with the project, the public entity can make a claim against the bond as a penalty. If this happens, the surety will pay the penalty, and then seek reimbursement from the contractor who posted the bond.
-What are performance bonds?
Performance bonds are typically posted by the GC for the benefit of the public entity. A performance bond guarantees that the contractor will fulfill all of their obligations under the contract.
If the contractor fails to perform according to the contract, the entity can submit a claim against the bond. At that point, the surety can either pay for the cost of completion, finance the current contractor, or take over the completion of the project by hiring their own contractor. Again, at the end of the day, the contractor who posted the bond will be required to reimburse the surety if a claim is made against the bond.
-What are payment bonds?
These bonds are meant to protect everyone else up and down the payment chain. A GC will post a payment bond to guarantee that the subs and suppliers working on the project are paid what they’ve earned. If a project participant goes unpaid, they can make a claim against the bond, similar to how a mechanics lien claim is made against the property on a private project. Think of a payment bond as a “pile of money” that protects the property from lien claims and ensures everyone is paid.
Levelset’s mission is to empower contractors to always get what they earn. Levelset’s products help millions in the construction industry each year to make payment paperwork and compliance easier, get cash faster, monitor the risk on jobs and contractors, and better understand payment processes and rules. The results are faster payments, access to capital, and fewer surprises. Backed by investors like Horizons Ventures, S3 Ventures, Altos Ventures, Operating Venture Capital, and Brick & Mortar Ventures, Levelset is headquartered in New Orleans, Louisiana, with offices in Austin, Texas, and Cairo, Egypt, and is over 200 employees strong. Learn more at www.levelset.com.
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9 июл 2024
